USD Downside Limited Ahead Of July 4 Holiday, USD/JPY Dips Supported

The early USD trends were to the downside, although the BBDXY index didn't test sub intra-session lows from Wednesday. The BBDXY last tracked near 1265.25, down slightly for Thursday trade so far.

• There has been no cash Tsy trading with US markets out for the July 4 holiday later. Futures in this space are a touch lower. US equity futures are close to flat, but regional equity markets have been positive, lending a slight risk on trade, although we sit away from best levels.
• AUD/USD was last 0.6710/15, while NZD/USD is around 0.6110. For the A$, higher iron ore prices are also a positive, although recent gains have been dominated by positive yield momentum. Both currencies remain sub Wednesday highs. The Australian May trade surplus was slightly below expectations but didn't impact sentiment.
• USD/JPY was weaker in earlier trade, but remains supported on dips. From lows at 161.14, we last tracked near 161.50/55, only down slightly for the session. FX intervention risks remain, but as we noted earlier, USD/JPY rates of change below April levels, which came prior to intervention.
• News flow has been light today, with focus remaining on Biden's election prospects and whether he will stay in the race. A group of Democrat Governors backed the President, but a Bloomberg story stated some Democrat Senators have expressed doubts.
• Later the ECB’s Lane and Cipollone speak and the minutes from the June 5-6 meeting are published. The UK election is also held. German May factory orders print.