Greenback Finds Poise, Japanese Holiday Limits Activity

The greenback found poise after Wednesday's slump caused by below-forecast U.S. CPI data, as Fed officials warned against excessive optimism on that front and signalled their intention to continue raising interest rates into next year. The BBDXY index edged higher but then halved gains as the session progressed. The U.S. dollar occupies the top spot in G10 currency scoreboard, although it outperforms by very narrow ranges.

• USD/JPY added ~20 pips, flirting with the Y133.00 mark through the session. Liquidity was thinned out due to a public holiday in Japan. Risk reversals crept higher, albeit 1-year skews struggled to return above par.
• The Aussie dollar was the worst G10 performer even as U.S. e-mini futures advanced, signalling continuation of positive sentiment. From a cross-asset perspective, iron ore traded on a firmer footing but gold softened.
• Today's data highlights include weekly jobless claims & monthly PPI out of the U.S.