Recoups Earlier Losses

Dollar sentiment has improved, the BBDXY back in positive territory for the session, last above 1239.30. Tuesday highs were close to 1241 for the index, so we remain within recent ranges. There doesn't appear any obvious catalysts for the turnaround, but it is also evident in the EM Asia FX space as well.

• USD/JPY traded through Tuesday session highs, touching 132.52, before edging lower (132.35/40 last). AUD/USD is back sub 0.6890, -25pips off post data highs, while NZD/USD is just under 0.6370. EUR/USD is back below 1.0730.
• US equity futures are off slightly, with eminis close to flat. US cash Tsys yields remain lower, -1.5-2.5bps down across the curve.
• For USD/Asia pairs, USD/CNH is back to 6.7950, +0.15% firmer for the session. Onshore media reports note that policy can still be adjusted lower from a monetary policy standpoint, which may be weighing at the margin. USD/CNY is back to 6.7850 in early trade.
• 1 month USD/KRW is seeing a more decent rebound, last at 1248, +0.65% for the session. Onshore equities are back to slightly lower for the session in terms of the Kospi, giving up early gains. First 10-days trade data for Jan showed a better headline result, but average daily exports remained deeply negative in y/y terms (-14%).