FX Update: Narrow ranges have prevailed
FX Update: Narrow ranges have prevailed so far today, with the dollar consolidating after edging lower in recent sessions following the misses in December jobs and CPI data out of the U.S. EUR-USD plied a narrow range under the eight-day high seen yesterday at 1.1163. USD-JPY posted less than a 15-pip range so far today, capped on the upside by 109.99. The pair is consolidating strong gains from last week's low at 107.65, which was seen in the initial wake of the Iranian missile strike on U.S. military bases in Iraq, which capped out at the eight-month seen on Tuesday, at 110.21. Yen crosses have followed suit. Cabled edged out a three-day high at 1.3058, and GBP-JPY a six-day high, while EUR-GBP held above yesterday's low. AUD-USD clawed out a three-day peak at 0.6919 before settling back at near net unchanged levels near 0.6900. USD-CAD remained in a narrow range just above three-day low seen yesterday, at 1.3035. Equity markets have turned flat after the MSCI all-country world index edged out a fresh record following the signing of the phase-1 trade deal between the U.S. and China. It took nearly 20 months to arrive at this point, though the deal doesn't fully eliminate tariffs, while the $200 B worth of U.S. products for China to buy is a target, and not set in stone. The enforcement mechanism worked into the deal also implies that there will be a risk snapback of U.S. tariffs or China's commitment. The two sides will also be working on a phase-2 deal, which deals with the thorny issues of security and technology transfers. There is, however, conjecture that President Trump will for now go easy on China while he focuses on the November presidential election.