Analysts at Westpac explained that the US dollar recovered some lost ground Friday, with Japanese officials sounding extra concern over yen appreciation. US housing and consumer sentiment data printed on the strong side but treasury yields slipped as 13 Russians were indicted for election interference.
Key Quotes:
"Markets lacked a clear theme Friday.
News included a US proposal to impose tariffs on aluminium imports, upside surprises on second-tier US data and indictments by the Mueller investigation of 13 Russians for interfering in the 2016 election.
US dollar weakness started to reverse in London trade, extending into the NY weekend.
EUR/USD fell from 1.2550 to probe under 1.2400. GBP/USD rolled over from 1.4140 to 1.4000/20.
AUD/USD followed the same pattern, from a high of 0.7988 in London to as low as 0.7893, starting the week just above 0.7900.
NZD/USD similarly rose to 0.7437 before retracing to 0.7380.
AUD/NZD slipped to fresh six-month lows around 1.0700.
USD/JPY had fallen as far as 105.55, a low since November 2016, but recovered to be slightly higher on the day at 106.40, with Japanese officials saying they were more concerned about sudden yen appreciation.
US 10yr treasury yields fell from 2.91% to 2.87%, while 2yr yields were steady between 2.18% and 2.20%. Fed fund futures yields price a total of four hikes by end-2019.
In second-tier US data we saw housing starts rise 9.7% in Jan (vs 3.5% expected), and building permits rise 7.4% (vs 0.0% expected). Consumer sentiment (University of Michigan) rose from 95.7 in Jan to 99.9 in Feb (vs 95.5 expected), with 5-10yr inflation expectations remaining steady at 2.5%.
Today's regional calendar is light and US markets are closed for Presidents Day."
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