Dollar Gains Pared Post Israeli Strike Headlines

Market risk aversion surged amid headlines of missile attacks from Israel on Iran. The BBDXY got to highs of 1271.06, but we now sit back close to 1266, only +0.20% firmer for the session.

• Yen and CHF rallied strongly, but also sit away from best levels. USD/JPY got to 153.59, but we are now back to 154.40/45, only marginally stronger in yen terms. USD/CHF is back near 0.9085, against earlier lows of 0.9013.
• The slightly weaker than expected Japan CPI print didn't impact yen sentiment.
• Part of the stabilization in risk sentiment has reflected that nuclear facilities in Iran were reportedly not damaged, while Fox News noted it was the strike was limited in scope, per US officials.
• Some Iranian headlines also deny an attack took place and hat reports of explosions were the activation of the country's air defence system.
• AUD and NZD remain weaker by around 0.30%, but away from session lows. AUD/USD was last around 0.6400 (earlier lows at 0.636), while NZD/USD tracks near 0.5880 in latest dealings (earlier lows 0.5852).
• US equity futures remain in the red, but losses are now under 1%. Earlier the Nasdaq future was off by 2%. US yields remain lower, but like elsewhere are up from earlier lows.
• Looking ahead, UK retail sales, German PPI and speeches from BoE's Ramsden & Mann, ECB's Nagel and Fed's Goolsbee, will be in focus.