[MARKET ANALYSIS] USD pauses overnight after recently weakening against peers as oil prices and yields dropped

DXY: Flat

• Paused overnight after broadly weakening against G10 peers yesterday following a drop in oil prices on a couple of developments, including US President Trump stating that the US is in the final stages of talks with Iran, and Al Hadath reported that the Pakistani Army Chief may visit Iran today to announce the final draft of the agreement text. Elsewhere, the FOMC Minutes had a hawkish element, but saw a fleeting impact on the USD, in which the two main takeaways were that many policymakers preferred to remove the easing bias from the policy statement, and the majority of participants saw a hike likely warranted if inflation persists.

EUR/USD: Flat

• Trades rangebound and holds on to recent gains after benefitting from the weaker dollar amid the encouraging geopolitical headlines, while there was also a prior source report that the case for an ECB June rate hike was “nearly sealed” as the inflation outlook moved towards a more adverse scenario.

GBP/USD: -0.1%

• Fades some of its recent advances, but retains the 1.3400 status with the pullback limited amid the constructive mood and after lower oil prices offset the recent lower-than-expected UK CPI data.

USD/JPY: Flat

• Trades sideways near the 159.00 focal point with the pair unreactive to a slew of data releases from Japan and hawkish rhetoric from BoJ's Koeda, who called for the BoJ to continue raising the policy interest rate.

Antipodeans: AUD/USD -0.6% / NZD/USD -0.2%

• Retreated with AUD pressured following disappointing jobs data, which showed a surprise contraction in headline Employment Change and an uptick in the Unemployment Rate.