US FX WRAP: Dollar mixed vs. G10 peers as havens outperform and Kiwi lags post-CPI

The Dollar Index was lower on Thursday amid light currency-specific newsflow, as havens JPY and CHF outperformed given the risk-off tone. As for the Greenback, the geopolitical situation, as expected, remains in focus, and concerns over an escalation continue to increase after further Houthi attacks in the region. Once again, there was no tier-1 data out of the US, while Initial Jobless Claims continued to hover around the 200k mark, reflecting the low-hire, low-fire economy. Earnings remain in focus, and both Tesla and Meta saw losses after their reports, which weighed on wider risk and fuelled a further AI sell-off.

In G10 FX, safe-haven FX outperformed on the aforementioned risk tone, with USD/JPY trading in a 156.69-158.25 range, while the Loonie was the next best performer on surging oil prices. The Antipodeans were the laggards, with the Kiwi sitting at the bottom of the pile, weighed on by cooler-than-expected inflation metrics. However, inflation remains elevated, and money markets continue to price in a hike at next week's RBNZ meeting. Back to the Yen, Japan's Rengo union reportedly seeks a 6% wage increase for 2027 and maintains a minimum wage hike benchmark of 5% or more in its 2027 policy. As a reminder, Rengo is Japan's largest national trade union confederation, and its wage talks are closely watched by the BoJ given the implications for prices and inflation.

EUR saw slight losses, as concerns in France remain rife. MUFG writes that the sell-off in French government bonds could be extended by Moody's sovereign credit rating review, scheduled for Friday evening. Moody's currently rates France at Aa3, one notch above its S&P and Fitch ratings.