💱Orderly FX Flows Seen Heading Into FOMC January Meeting: Cable FX Macro

The greenback remained fragile and under pressure, trading softer in G10 space for much of the day. It consolidated without a strong rebound, reflecting stretched positioning and poor sentiment. The dollar index hovered near multi-month lows after recent declines.
JPY standout: The yen was the strongest G10 performer, with gyrations pointing to market nervousness (likely around intervention risks). USD/JPY saw initial USD gains to near 154.90 before pulling back sharply on large orders and intervention jitters. Yen strength tied into broader caution, including bond market moves (e.g., notable shifts in Japan 2s10s curve).
Other G10 currencies: Most held firmer against the USD, with no dramatic reversals. The dollar's broader "sell America" tone persisted, influenced by factors like potential US-Japan intervention speculation, trade/tariff uncertainties (e.g., mentions of South Korea), and Fed policy anticipation.
No major turnaround from Monday's dollar weakness (where JPY led gains ~1.3% vs USD). Flows appeared orderly rather than aggressive, with some positioning caution ahead of events like Fed-related developments. Options expiries and macro hedging likely played roles, but nothing indicated outsized directional flows.

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