US FX WRAP: Dollar little changed as geopolitical risks increase into the weekend

USD saw mixed performance against peers to end the week, with volatility easing on Friday. The week has seen volatile equity moves and geopolitical risk support the USD, while soft inflation data had a greater offsetting impact. Today's updates sparked little reaction in FX. Geopolitical tensions have only increased ahead of the weekend, with Iranian attacks on tankers attempting Hormuz transits continuing. Additionally, Axios reported that the Trump admin is sending dozens of additional refueling planes to Israel in preparation for a potential expansion of military operations against Iran. Remarks from Iranian officials suggest the time is ticking for Iran to hold off on broadening offences, the latest threat being Iran's General Rezai: "If US strikes continue for several more days, we will move into a phase of full-scale offensive operations".

Meanwhile, US data sent mixed signals. Export prices declined more than expected, Import Prices came in hot, and UoM topped expectations, with inflation expectations moving lower in the short term; USD was muted to the data points. DXY finished lower on the week at 100.76 from the open of 101.037.

AUD and GBP underperformed in the G10 space against the Buck, trimming recent gains. Nonetheless, Sterling makes a fourth week of gains, as markets now await the coronation of incoming PM Burnham on Monday and his cabinet picks. Cable now sits around 1.3450 from earlier WTD highs of 1.3558, and AUD/USD sits at ~0.6981.

USD/JPY was little changed as it remains around 162.45, just shy of the 162.84 YTD high. The BoJ reportedly sees little need for consecutive rate rises and may reconsider its assessment of economic risks, according to Bloomberg, citing sources; the BoJ is likely to raise its growth forecast for this year from its current 0.5%.