Daily Currency Update

USD - US Dollar

The USD is weakening as markets in North America reopen after the extended weekend. Monday's trading was subdued, with the market's attention on upcoming earnings from major tech companies and potential risks from Federal Reserve announcements and FOMC meeting minutes expected later in the week. The USD began to decline during the early European trading session, and although the movements are modest, the losses are significant enough to indicate increasing pressure on the USD. US yields have decreased from their recent highs, and overall, major bond markets have strengthened, leading to lower yields in Europe. The only economic announcement from the US today is the Leading Index data, scheduled for 10ET.

CAD - Canadian Dollar

After the holiday break, the focus shifts back to the CAD as Canada's CPI for January is set to be released at 8:30ET. Market expectations lean towards a 0.4% monthly increase and a 3.2% annual rise, a slight decrease from December's 3.4%. Strong headline figures and persistent core inflation could lessen the likelihood of a BoC rate reduction, with a 25bps cut in June now seen as just slightly more probable than not. Although the CAD's current trading level is somewhat higher than the fair value estimate of 1.3582, its gains don't seem excessively exaggerated from a fundamental standpoint. Should inflation figures exceed expectations, the CAD could see further appreciation. Observe USD/CAD trends.

EUR - Euro

In European trading, the EUR climbed from to momentarily regain the 1.08 mark before slightly retracting. This uptick aligned with the announcement of an unexpectedly large Eurozone current account surplus for December at EUR 31.9 billion, although such data usually don't significantly impact the market. Despite a slight decrease in spot gains, the EUR's recovery to above 1.08 indicates an inherent strength in the currency, with investors keen to buy the EUR following recent declines to around the 1.07 level.

GBP - British Pound

Sterling remains relatively stable, oscillating around the 1.26 mark in today's trading, mirroring the overall USD trend. Data published Sunday night indicated a slight increase in UK home asking prices in February, spurred by anticipated rate decreases invigorating the housing sector. The Rightmove index recorded a 0.9% rise in February and a 0.1% annual increase, marking the first positive year-over-year figure since last August.