Daily Currency Update

USD - US Dollar

The week is concluding somewhat uneventfully. The U.S. dollar is showing mixed performance against the main currencies in subdued trading. Yesterday's U.S. core PCE data matched the anticipated 0.4% month-over-month increase. Since the market had largely anticipated a stronger figure, the actual result, which met expectations, was interpreted somewhat like a dovish signal. More data over the next few months is necessary to convince the Federal Reserve that inflation is steadily heading towards the 2% target. The Dollar Index (DXY) has seen a slight decrease in this session, though it's on track for a small weekly rise. Today's focus in the U.S. is on manufacturing data (PMI and ISM), Construction Spending, and the final February reading of the University of Michigan Sentiment index.

CAD - Canadian Dollar

The CAD remains largely unchanged in today's trading session. Despite this week's uptick in crude oil prices, the CAD has not been significantly affected. There are signs of slight improvement in broader commodity prices, although this comes from a low starting point (the Bloomberg Commodity Index is attempting to find stability at its lowest point in over two years). Any further increases in commodity prices could potentially boost the CAD, but for the moment, unfavorable interest rate differentials and fluctuating investor sentiment are expected to maintain its subdued performance. Canada is set to release its Manufacturing PMI data for February at 8:30 AM Eastern Time. Observe USD/CAD trends.

EUR - Euro

This morning's Eurozone CPI figures indicated a slower-than-anticipated reduction in inflation rates. The reported data showed a year-over-year increase of 2.6% for headline inflation and 3.1% for core inflation, a decrease from January's figures of 2.8% and 3.3%, respectively. Analysts had forecasted a drop to 2.5% for headline inflation and 2.9% for core inflation. Although the overall trend of easing inflation persists, these figures lend weight to the arguments of some European Central Bank policymakers who suggest delaying rate cut evaluations until mid-year. Additionally, the final Eurozone Manufacturing PMI for February was slightly adjusted upwards to 46.5 from 46.1. Meanwhile, any declines in the EUR/USD exchange rate to the 1.08 level continue to meet with buying support.

GBP - British Pound

Today's UK data releases showed additional encouraging trends in the housing sector, as evidenced by the Nationwide House Price Index, which climbed by 0.7% in February, surpassing expectations, and marked a 1.2% increase on an annual basis—the most robust growth observed since the end of 2022. Additionally, the Manufacturing PMI for February was marginally adjusted upward to 47.5 from 47.1. The pound continues to trade within a specific range against the US dollar, but any declines towards the 1.26 level are finding strong support.