USD/JPY Hits Fresh Highs Before Reversing, A$ Outperforms Modestly

Earlier USD index gains were not sustained, as US Tsy futures have moved away from their lows, as the market continues to digest the debt ceiling agreement. The BBDXY got to a high of 1246.77, but now sit back around 1245.40. The early move was largely thanks to USD/JPY climbing to fresh highs, just above 140.90, but from there the pair dipped back sub 140.50, which is where we have spent much of the rest of the session.

• AUD/USD has outperformed modestly, we got to highs around 0.6545, but now sit back closer to 0.6530, still +0.20% above NY closing levels from last Friday. Some firmness in commodity prices has helped, with iron ore back above the $100/ton level, although copper is down a touch.
• NZD/USD dips sub 0.6050 have been supported, but the pair has been unable to make much headway above this level.
• EUR and GBP are up from earlier lows but have maintained tight ranges. GBP/JPY got close to 174 in early dealings, fresh highs back to 2016, but we sit back at 173.50/55 now.
• With UK and US markets out, the event/data calendar is very light. ECB's De Cos is due to speak.