Dollar Can't Sustain Early Positive Momentum, As Yields Off Wednesday Highs

The USD index has tracked relatively tight ranges in the first part of Thursday trade. The early impetus was to the topside, but the BBDXY couldn't sustain a move above 1237.20. We last track around the 1236.20 level, little changed versus end NY levels from Wednesday.

• Early USD gains were aided by a rise in US yields, a follow on from the NY session, as better US data pushed benchmark yields higher across the board. However. US TSY 10yr futures couldn't break sub Jan 19 lows, which has seen yield reverse earlier gains.
• USD/JPY has tracked relative tight range, the pair last near 147.60/65, slightly weaker in yen terms versus NY closing levels. US-JP 10yr yield differentials are modestly lower, as a poor 40yr bond auction has seen JGB yields firm (10yr last near 0.74%).
• AUD/USD sits near 0.6580, also tracking a tight range. PM Albanese has announced rejigged tax cuts (from July 1 this year), but stated they won't add to inflation pressures. The currency hasn't received support from higher China/HK equities, while iron ore also continues to recover ground (last above $136.50/ton).
• NZD/USD is near 0.6110, an earlier dip to 0.6100 supported. CHF has lost around 0.2%, reversing some of Wednesday's 0.86% gain.
• Looking ahead, Norges Bank and ECB meetings take focus. The US sees the Q4 advance release for GDP before the monthly PCE report for December on Friday.