USD Index Testing Sub Wednesday Lows, Yen The Outperformer

The BBDXY is testing below Wednesday lows in recent dealings, last under 1235. We are around 0.15% weaker for the session so far, with yen the clear outperformer, up nearly 0.65% against the USD.

• Cross asset sentiment in terms of lower US equity futures, coupled with a slight rise in US yields hasn't mattered much for the USD today. Regional equity sentiment has softened somewhat as well.
• The rise in the gold price to fresh record highs above $2160 has been a positive, although how much of this is just reflective of USD weakness is difficult to say.
• Yen strength has come down to a number of factors, stronger Jan wages data, a large union announcing larger pay increases this year versus last year, while BBG noted some Japan government officials are in favor of a near term BoJ shift (although Mar versus Apr wasn't specified). BoJ speak also noted steady progress towards the 2% inflation goal. Governor Ueda is before parliament this afternoon.
• USD/JPY tracks near session lows in recent dealings, close to 148.40. This is just under the 50-day EMA (148.51). Note as well a chunky option strike at 148.25 for notional 1.13 bn (USD call, JPY put) expires on the 12th of March. The Feb 7 low came in at 147.63, which may come into play if we can break lower.
• AUD/USD is also higher, along with NZD. The A$ last near 0.6590 around 0.35% stronger. NZD/USD up 0.30%, tracking close to 0.6150. Firmer commodity prices have likely helped both currencies, as other cross-asset drivers haven't been supportive.
• Later Fed Chair Powell testifies before Congress and Mester speaks on the economic outlook. In terms of US data, there are February Challenger job cuts, jobless claims and January trade. The ECB decision is announced including updated forecasts and press conference.