Daily Currency Update

USD - US Dollar

Today's trading may perk up with the 8:30 AM ET release of CPI data, eagerly anticipated all week. December is expected to see a modest 0.2% month-to-month increase, with the year-to-year rate slightly rising to 3.2% from November's 3.1%. Core prices might go up by 0.3% month-to-month but could drop annually to 3.8% from 4.0%. A slowdown in core price growth will be positive, but the market will closely watch overall trends and the 'supercore' measure, indicating persistent core service prices. The USD remains stable against major currencies but has seen a slight decline recently due to impending inflation data. Stocks are up and bond yields down, hinting at expectations for lower inflation. Recent US inflation reports have often been lower than expected. Post-CPI, the focus may shift to potential USD strengthening in the coming weeks, with markets predicting about 18bps of Federal Reserve easing in March. Claims data is also due at 8:30 AM ET.

CAD - Canadian Dollar

The CAD remains relatively stable in today's session, maintaining the trading range established by Friday's spot swings following the US NFP data. A pro-risk sentiment is providing some support to the CAD, particularly as stocks currently have a significant correlation with it. However, the CAD appears somewhat overextended compared to fair value estimates (today's equilibrium assessed at 1.3490). With no major domestic news or developments, external influences—such as the overall USD mood, risk sentiment—and technical aspects will keep influencing the CAD's movement. Observe USD/CAD trends.

EUR - Euro

During overnight trading, EUR/USD approached 1.10 but subsequently retreated. Nonetheless, the spot continues to find strong support during dips, particularly before this morning's release of US data. Although ECB officials have expressed somewhat pessimistic views on Eurozone economic trends recently (suggesting stagnation at the end of the previous year), there's no sign that policymakers are considering policy easing at the moment. This stance is reinforced by ECB staff projections anticipating a slight increase in inflation in the early months of this year.

GBP - British Pound

Sterling has seen a modest rise against the USD today, mirroring the trend of its major counterparts. This increase is primarily due to market positioning ahead of the US CPI release, as there have been no significant domestic developments (with November output data scheduled for release on Friday).