USD

After dipping as much as 0.3% yesterday, the Dollar finished in the green for the fourth day in a row and seventh out of the past eight en route to a six-week high. Today, the Greenback trades sideways heading into the North American session.

Earlier today, US mortgage applications dropped for the fourth week in a row by 0.8% as of last Friday. 

Refinancing requests fell by 1.9%, home buying applications declined by 0.3%, and the average interest rate for 30-year fixed-rate mortgages increased to 7.16%, the highest since October 2022.

Meanwhile, new housing construction in the US saw a 3.9% rise in July, while building permits also increased slightly by 0.1%, although overall permits fell by 13% on a yearly basis.

Later this afternoon, the latest FOMC meeting minutes are set for release at 2:00 PM EST.

EUR

The Euro is pushing higher today and looking for its first winning day this week after a stronger-than-expected industrial output report for June.

Eurozone industrial output grew by 0.5% in June compared to the previous month, driven by a resurgence in energy production. On a yearly basis, industrial production decreased by 1.2% in June, better than market expectations of a 4.2% drop-off.

In addition, Eurozone GDP was confirmed at 0.3% in Q2, with France and Spain showing sustained growth, Germany stagnating, and Italy unexpectedly contracting by 0.3%. On an annual basis, the Eurozone economy grew by 0.6%.

Finally, employment in the Eurozone increased by 0.2% quarter-on-quarter in Q2 and 1.5% annually.

GBP

Sterling is back in the green today as cable traders digest the latest UK inflation data released this morning.

Headline Consumer inflation decreased to 6.8% in July from 7.9% in June, the lowest since February 2022, driven by lower fuel prices. On a monthly basis, consumer prices fell by 0.4%, the first decrease since January. However, the core rate remained sticky at 6.9%, indicating more work may need to be done by the BoE this year.

Meanwhile, producer prices dropped by 0.8% year-on-year in July, the first deflation since December 2020, mainly due to decreased costs of petroleum products, chemicals & pharmaceuticals. On the other hand, monthly inflation rose by 0.1% instead of declining as expected.

JPY

The Japanese Yen is resuming its slide today and continuing to set new 2023 lows as traders continue to monitor signs of market intervention from Japanese officials.

On the data front, Japan's Reuters Tankan manufacturer's sentiment index surged to +12 in August from +3 in July, marking its highest level in a year. However, respondents remained cautious due to concerns about China's slowing growth.

Looking ahead to this evening, Japan's trade data for July is slated for release at 7:50 PM, with exports expected to fall 0.8% and imports expected to drop 14.7%.

CAD

The Loonie is inching lower this morning as markets assess this morning's housing and wholesale figures out of Canada.

Beginning with housing starts, construction in Canada decreased by 10% in July to nearly 255K units, better than market expectations. On the other hand, urban starts fell by 11% due to drops in both multi-unit and single-detached urban starts.

Moving to the wholesale front, monthly wholesale sales fell 2.8% in June, slightly less than market forecasts, with lower sales reported across most subsectors and provinces. 

From a quarterly perspective, wholesale sales fell 2% in Q2.

MXN

The Mexican Peso is back in the green for the first time this week following two-straight daily losses against the Dollar. With Mexico's economic calendar empty until Friday, MXN remains mainly driven by moves in the US Dollar, oil prices, and headlines surrounding China's economy.

On the political front, former Mexico City Mayor Claudia Sheinbaum is growing her lead in the race to become the ruling MORENA party's candidate for Mexico's 2024 presidential election, according to a recent poll. Given the strong approval ratings of current President Andres Manuel Lopez Obrador, the next MORENA party leader is expected to be the favorite heading into the election.

BRL

The Brazilian Real is mostly unchanged on the day and still down over 1% for the week versus the Greenback as LATAM currencies remain under pressure from worries surrounding China's economic situation and a resilient US Dollar.

Yesterday, the BCB'S Director of International Affairs, Fernanda Guardado, emphasized the bank's dedication to its current pace of rate cuts, stating that substantial positive surprises in inflation would be needed for the BCB to consider a more aggressive pace to its easing.

Also crossing the wires yesterday, BCB Governor Roberto Campos Neto mentioned that the country might need to raise its inflation estimates by about 0.4% between August and September due to a fuel price increase by Petrobras.  

CNY

The Chinese Yuan continues its descent this morning after another drop in domestic home prices added to the mounting concerns surrounding China's property sector.

In July, average new home prices in China's major cities slightly decreased by 0.1% year-on-year, continuing the concerning trend despite some cities like Beijing and Chongqing seeing price increases. From a monthly perspective, there was a 0.2% decline, its first monthly price drop since December 2022.

Meanwhile, news of missed payments on investment products by a major trust firm, Zhongrong International Trust Co., has exacerbated investor concerns over China's shadow banking system and its high exposure to the property sector.