Daily Currency Update

USD - US Dollar

Yesterday saw a dip in the US Dollar, with the USD Index finishing lower, even after initial uptick. The spotlight is now on the spending habits of US consumers, with a particular focus on the retail sales for January, which are anticipated to rise slightly by 0.2% month-over-month. Unless there's an unexpected shift in retail sales data or a sudden increase in jobless claims, the dollar's downturn will likely be very limited. The low volatility across different markets has kept the carry trade attractive, supporting a high-yield dollar. The DXY will likely remain rangebound between 104.50 and 105.00.

CAD - Canadian Dollar

The CAD is attempting a rebound from recent losses, trading around 1.3550 as we open this morning’s session. The loonie continues to be pressured from declining Crude oil prices, with WTI Crude oil extending its losses due to unexpected rises in US oil inventories and Middle East tensions. Observe USD/CAD trends.

EUR - Euro

The EUR is stable under 1.0750, unaffected by ECB President Lagarde's remarks. The market's focus is on the upcoming US Retail Sales report for monetary policy hints, while issues like declining US commercial real estate values and their effect on banks have had minimal impact on the currency pair. Nonetheless, elevated US interest rates are putting pressure on EUR/USD, with the current rate scenario presenting chances to position for anticipated Fed easing.

GBP - British Pound

The GBP  is slightly pressured, trading near 1.2550 after a 0.2% annual contraction in the UK's Q4 GDP. UK inflation remains at 4%, below the 4.2% forecast, with core inflation at 5.1%, also under expectations. BoE Governor Bailey mentioned the latest inflation data doesn't shift their February policy view, calling for more evidence of price drops.