FX Update: The dollar has traded moderately higher
FX Update: The dollar has traded moderately higher, heading into the London interbank open with a 0.3% advance versed the euro, Swiss franc and yen, and comparatively more modest gains against the Australian and Canadian dollars. The New Zealand dollar has stood out as the weakness currency of the units analysts track, with a 0.7% loss versus the U.S. buck. The losses in the antipodean currency came despite above-forecast retail sales data out of New Zealand, with the dynamic reportedly coming amid position jigging in NZD-AUD, which has rebounded some over the last day following a period of notably underperformance that drove the cross to a six-month low earlier in the week. EUR-USD has ebbed back to around 1.2280, correcting from yesterday's 1.2352 high. USD-JPY has traded firmer today after two consecutive down days, lifting to the lower 107.0s from yesterday's four-session low at 106.59. The forex market has been continuing to factor in the recent revival of Fed tightening expectations and the associated lift in U.S. Treasury yields, which this week have pushed to multi-year highs across the curve. And while stock markets have picked up over since last week, the rebound has been moderate and key indexes remain well off the record highs that were seen in late January. In the current climate, the dollar is tending to rally during phases of pronounced risk-off sentiment in global markets, or phases of muted risk-on. Japanese January inflation data had limited impact.