Strong Regional Equities Keep USD Upside Limited, As NFP Comes Into Focus

The USD index (BBDXY) sits marginally lower in latest dealings, last near 1230.2. We are up from earlier multi week lows at 1229.45.

• Early sentiment appeared as a carry over from US trade on Thursday, with yen strength in focus. USD/JPY got to fresh lows of 147.53, but we sit back near 147.85 now. Moves above 148.00 have drawn selling interest from the market.
• Data was mixed with real household spending comfortably below estimates (-6.3% versus -4.1% forecast and -2.5% prior). The market and BoJ may look through the print to a degree given positive wage growth signals for this year. Current account figures were stronger though.
• AUD/USD tried to break higher in early trade, but ran out of steam above 0.6630. Dips have been supported though and we were last a touch lower at 0.6625. A better regional equity tone in Asia Pac, amid broad based gains, except for onshore China markets, has aided sentiment this afternoon.
• NZD/USD has trailed somewhat, the pair last unchanged near 0.6175. The AUD/NZD cross is challenging the 100-day EMA at 1.0734.
• Recent sharp USD losses may be giving rise to some caution in the market around extending these moves further, particularly with the US NFP print coming up later. Canadian employment data will also cross later.