USD Off Slightly, A$ Recovers Some Ground, Despite Iron Ore Dip

The USD sits modestly lower in terms of the BBDXY, which last tracks near 1231.5. Earlier the index got sub the 1231 level and close to Jan 24 lows, but there was no follow through. Outside of an AUD rebound moves have been modest across the G10 space, as the market awaits NFP later.

• The A$ rebound has been aided by a better equity tone led by US futures in the tech space. China markets have been less supportive though. The active Iron ore contract in Singapore is back to a $126/ton handle, but this is above mid Jan lows.
• AUD/USD sits near 0.6600, which keeps us within recent ranges. After underperforming through Thursday today's moves may reflect some catch up.
• We had PPI and housing finance data earlier for AU but sentiment in the FX space didn't move on the prints.
• NZD/USD is also slightly higher, but hasn't rallied strongly past 0.6150. The 20 and 50-day EMAS sit near current spot levels, which may be acting as a near term resistance point.
• USD/JPY sits back in the 146.40/45 region and little changed for the session. The better US futures equity tone and slight uptick in US yields likely seeing some underperformance in yen relative the likes of AUD.
• The focus later will be on the January US non-farm payrolls which are expected to post a 185k increase with the unemployment rate rising 0.1pp to 3.8%. There are also final readings for Uni of Michigan consumer sentiment and durable goods orders. The BoE’s Pill and ECB’s Centeno speak.