USD Off Earlier Highs, A$ Marginally Outperforms

G10 FX markets have had a reasonably muted start to the week. The USD was mildly supported in early trade, as the market started off in risk averse fashion amid higher oil following further shipping attacks late last week and US troops in Jordan (near the Syrian border) coming under drone attack (with 3 reported casualties).

• However, the BBDXY couldn't breach the 1238 level, with US Tsys futures showing little follow through after spiking higher at the open. US equity futures opened weaker, but have clawed back losses, with Nasdaq futures back in positive territory. Oil prices moving off earlier highs has helped at the margins (Brent is still up around 0.50%). The BBDXY was last near 1237.
• AUD has outperformed marginally, up 0.20%, but hasn't been able to retake the 0.6600 handle. Outside of oil, other commodities are tracking higher, which is supportive at the margin.
• NZD/USD is also marginally higher, but hasn't drifted far away from 0.6100. Earlier trade data saw a narrower deficit in Dec, but the impact on sentiment was minimal.
• USD/JPY has stayed above 148.00 for the session, but couldn't sustained an earlier break above 148.30.
• Looking ahead, it is a quiet start to the week, with ECB speak and the Dallas Fed manufacturing survey on tap.