USD Firms, Tracking Higher For The 7th Straight Week

The USD index has firmed in the first part of Friday trade the BBDXY up 0.10% to be tracking above 1245. We are comfortably below earlier highs in the week (post the US CPI print above 1251), but still up for the week, which would be the 7th straight run of weekly gains.

• USD strength coincided earlier with Fed Bostic comments, which helped US yields firm a touch. The Fed official stated that he wants more certainty in the inflation fight before cutting rates. He added he projects 2 rates cut this year, which is obviously well short of what markets are pricing (close to 90bps). The comments don't appear a departure from what Bostic has said previously though.
• US yields are 1.5-2.5bps firmer across the benchmarks, the 10yr last near 4.25%.
• USD/JPY dipped in early trade to 149.83, but is back to 15.30/35 this afternoon just off session highs. Comments by BoJ Governor Ueda in parliament were in line with recent rhetoric, while FinMin Suzuki warned about FX, but again the language used didn't appear to a departure from what we have seen recently around intervention risks.
• AUD/USD and NZD/USD are also lower, albeit outperforming JPY at the margins. AUD/USD was last 0.6510/15, while NZD is back sub 0.6100. The positive regional equity tone (MSCI Asia Pac up 1%), may be providing some offset to the firmer US yield backdrop.
• Earlier RBNZ Governor Orr stated that more needs to be done to anchor inflation expectations, but didn't touch on the rates outlook in his speech.
• Looking ahead, UK retail sales data headlines the European docket on Friday before focus turns to US PPI figures and building permits. Preliminary UMich consumer sentiment and inflation expectations will round off the week.