[MARKET ANALYSIS] DXY slightly pulls back after strengthening yesterday on higher oil prices and yields, risk-off and multi-decade low jobless claims

DXY: -0.1%Takes a breather after strengthening yesterday as US yields climbed to fresh YTD highs in the short and belly of the curve, which coincided with the continued sharp rise in oil prices, with no signs of imminent de-escalation, while the recent USD strength was also likely facilitated by the risk-off tone and after the latest initial claims data, which dropped to the lowest level in almost 60 years. Nonetheless, the dollar has since pared some of the gains, but with the price action relatively muted overnight and with little reaction seen to the latest US Treasury's FX manipulation report, nor to the announcement of a fresh wave of 'forced labour' blanket tariffs of between 10%-12.5% on dozens of the US's trading partners.EUR/USD: +0.1%Gets some slight reprieve after recently suffering against the firmer buck, with the ECB meeting not providing any surprises and largely stuck to the data-dependent, meeting-by-meeting and no-commitment language, despite recent energy upside, while a source report later noted that officials are said to be ready to raise rates again in September.GBP/USD: FlatRemains lacklustre following the prior day's retreat but with further downside cushioned by support at the 1.3300 level and with participants looking ahead to UK Retail Sales data.USD/JPY: FlatPauses overnight after climbing yesterday to just shy of the 164.00 handle, while there was a muted reaction to the in-line Japanese CPI data and comments from the US Treasury, which stated that yen weakness has persisted despite narrowing of US-Japan interest rate differentials, and excess volatility in the yen is unwanted.Antipodeans: AUD/USD +0.1% / NZD/USD +0.2%Attempted to nurse some losses, albeit with the recovery contained alongside the negative risk sentiment.