FX Update: The dollar has traded on a softer tack
FX Update: The dollar has traded on a softer tack, while the yen, after gaining during the Asian session, corrected against most currencies as European stock markets and U.S. equity index futures found some bargain-hunting demand after the rout. EUR-USD has settled to a narrow orbit of the 1.1400 level, with the pair consolidating after printing a two-month low yesterday at 1.1378. The ECB is set to announce policy, and is widely expected to keep policy and rate guidance unchanged, with focus on President Draghi's response to the latest jitters in BTPs that were triggered by the standoff between Rome and Brussels over Italy's budget overshoot. USD-JPY lifted back above 112.00 after pegging a 10-day low at 111.82. Yen crosses have also lifted after posting posted fresh lows, as some of the yen's safe have premium unwinds as the global stock market rout came to a pause. There is conjecture in some market narratives that the Fed, and other central banks, with moderate their hawkishness, while the flurry of major corporations in the U.S. blaming higher input costs as a consequences of tariffs is seen as likely to influence President Trump's stance on China at some point. Cable settled around 1.2900, above recent lows, and AUD-USD also traded moderately firmer.