[MARKET ANALYSIS] DXY remains softer after weakening yesterday amid Fed commentary and as US CPI looms

DXY: -0.1% Remains softer after weakening yesterday alongside lower US yields and choppy crude prices, while there were several Fed comments, with the highlight coming from NY Fed President Williams, who sees one more rate hike as appropriate in 2026 and doesn't see a need for a rate hike in 2027 at this time, citing an optimistic view on inflation returning to 2% and is not seeing broad price pressure outside AI and energy, while the focus turns to the incoming US CPI report later today. EUR/USD: +0.1% Benefited from the softer buck and reclaimed the 1.1200 level. There were some comments from ECB officials, including Lane, who stated that the increase in long-term interest rates constitutes a material tightening and is relevant for the ECB in setting policy stance, while Lagarde said inflation has been rising predominantly, but not exclusively, as a result of energy prices, but added they are not seeing any second-round effects yet. GBP/USD: +0.2% Extended on the prior day's rebound but with price action remaining at the 1.3200 handle, while the latest comments from BoE Governor Bailey provided very little incrementally. USD/JPY: Flat Price action is range-bound in the absence of tier-1 data from Japan and following a previous source report that the BoJ is to lean against back-to-back hikes in October, but could adjust the language regarding the inflation target to "approx. 2%" from "approaching 2%". Antipodeans: AUD/USD +0.3% / NZD/USD +0.3% Edged higher amid an improvement in risk sentiment and after stronger-than-expected Chinese trade data.