BBDXY USD Index Testing 100-day MA Support, A$ Lags On Higher U/E Rate

The early trend for the USD was very much to the downside, as dollar weakness extended from Wednesday's US session. The BBDXY got to fresh lows of 1241.31, levels last seen on April 10, before sentiment stabilized somewhat. We last tracked near 1242.5, around 0.15% weaker for the session.

• Note for the BBDXY the simple 100-day MA is nearby to current levels (1242.31). We haven't been below this support point since March of this year.
• Yen gains drove USD weakness, as US Tsy 10yr futures climbed above Wednesday highs. Markets are refocused on Fed easing risks in light of the in line CPI print but weaker retail sales outcome.
• USD/JPY got to lows of 153.60, but we sit back near 153.90 in recent dealings, still around 0.65% stronger in yen terms. The Q1 Japan GDP miss saw USD/JPY push higher but it didn't have a lasting impact on sentiment (officials hope Q2 growth momentum will be better as higher wages benefit consumption).
• AUD/USD has struggled post the higher than expected unemployment rate for April (4.1% versus 3.9% expected). The detail wasn't as bad as the headlines suggested, however, it still indicates some softening in labour market conditions. The currency fell to 0.6677, but we sit higher now around 0.6690, as firmer equity market sentiment, led by China property gains, has provided some offset.
• NZD/USD is around 0.6125, slightly up for the session. The AUD/NZD cross got to lows of 1.0915 before stabilising somewhat.
• Looking ahead, the Fed’s Barr, Barkin, Harker, Mester, Bostic and BoE’s Greene speak. There are also US jobless claims, April housing, IP, trade prices and May Philly Fed index.