USD/JPY To Fresh Highs On US Debt Deal Optimism

Dollar indices sit slightly higher versus closing levels from the end of last week, the BBDXY last at 1246.60 (+0.05%). Most of the of gains in the index today can be attributed to fresh yen weakness. Broader risk appetite has firmed after weekend news of a debt ceiling agreement in the US.

• President Biden spoke earlier and urged both houses to pass the agreement and also added that he expects House Majority Leader McCarthy has the votes to pass the agreement.
• US equity futures opened up firmer, although eminis are down slightly from best levels, last 4227/28, +0.30%.
• USD/JPY has hit fresh highs of 140.92, we last sit slightly lower at 140.80/85, around 0.20% weaker in yen terms versus Friday's closing level.
• Better equity sentiment and slightly lower US Tsys futures are weighing on yen.
• EUR/USD is down slightly, last just under 1.0720, while GBP is currently steady around 1.2340/45. GBP/JPY got close to 174, fresh highs going back to 2016.
• AUD/USD is higher, last around 0.6525, while dips in NZD/USD under 0.6050 have been supported.
• A reminder that UK and US markets are closed today, while there is very little in the way of meaningful data events (just second tier data), which will keep the market on headline watch.