USD Indices Make Fresh Lows

USD weakness persists. The BBDXY index fell below 1220 before some support emerged. We were last at 1221.60, still -0.20% off NY closing levels. Cross asset signals have been positive from an equity standpoint, less so commodities. Bonds have been reasonably quiet, with US cash trading closed ahead of the MLK holiday.

• USD/JPY remains a strong focus point in G10 markets. The pair got to fresh lows of 127.23 before support kicked in, last around 127.65/70. Earlier highs were at the 128.20 level. 1 week implied vol continues to trend higher, last at 23.22%, ahead of Wednesday's BoJ meeting outcome.
• AUD/USD got to a high of 0.7019 before selling interest capped the move. We were last at 0.6995/00. Slightly weaker metals price action, with China authorities looking to clamp down on iron ore speculation weighing on prices, hurting the A$ at the margins. We were last around $120.00/ton, -4.3% for the session, with copper also off recent highs.
• NZD/USD has outperformed slightly, holding above 0.6400, +0.50% for the session. Like the A$ we found some selling interest closer to 0.6430, but the trend still looks positive.
• NOK has also traded with a firm bias, +0.80% to the 9.8250 region. Spill over from higher oil prices last week likely helping at the margin.
• Looking ahead event risks are light with US markets also impacted by the MLK holdiay.