USD

After closing in the green for the sixth consecutive week, the US Dollar Index is taking a step back this morning as global risk sentiment improves due to the news of China's latest stimulus measures.

Meanwhile, traders are still assessing Friday's comments from Fed Chair Jerome Powell at the Jackson Hole Symposium. While remaining non-committal, Powell warned that 'additional evidence of persistently above-trend growth could put further progress on inflation at risk and could warrant further tightening of monetary policy.'

Market pricing still indicates that the Fed is expected to keep rates unchanged in September. Still, the probability of a 0.25% hike in November has risen above 50%, compared to around 30% last week.

EUR

The Euro is inching higher this morning after experiencing its sixth consecutive losing week on Friday. Today's rebound in EUR/USD comes as Beijing unveils fresh stimulus measures, bolstering risk appetite.

On the data front, Eurozone bank loans to households grew by 1.3% year-on-year in July, marking the slowest growth rate since 2015, as the ECB's rate hike cycle continues to exert pressure on credit. Moreover, business loans also expanded at the weakest rate since 2021, resulting in a combined credit growth rate of 1.6%, the lowest seen since 2016.

Regarding interest rates, ECB President Christine Lagarde refrained from revealing her stance on the ECB's upcoming interest rate decision in September, while market pricing suggests that the likelihood of another 0.25% increase is almost evenly split.

GBP

The British Pound is little changed on the day as London traders remain on the sidelines due to the Summer Bank Holiday, resulting in thin trading during the European session. GBP/USD has experienced losses in each of the past four sessions and is currently sitting at its lowest level since June 12.

The main event on the UK calendar this week will be Friday's final print for the August manufacturing PMI. Other notable releases include mortgage lending and approval numbers scheduled for Wednesday, while the Nationwide Housing Price Index is set for release on Friday, following the manufacturing PMI.

JPY

The Japanese Yen is once again in the red this morning after registering its fourth consecutive weekly decline on Friday, as JPY traders continue to assess the latest comments from BOJ Governor Kazuo Ueda.

During the Jackson Hole Symposium, Ueda discussed the BOJ's monetary policy, highlighting that despite Japan's 3.1% inflation rate in July, the BOJ believes that underlying inflation still falls short of its 2% target, thus justifying their current approach. He also expressed concerns about China's slowing economy and the uncertainties surrounding global trade diversification away from China, which could impact Japan's economy and policies. Additionally, Ueda emphasized Japan's need to enhance its infrastructure to attract top companies.

CAD

The Loonie is trading lower this morning, having just completed its sixth consecutive losing week against the Greenback. Thanks to its recent decline, the Loonie now finds itself at a three-month low, driven in part by the Fed's higher-for-longer approach to interest rates and Canada's growing trade deficit.

The Canadian economic calendar is relatively light this week until Thursday, when the latest current account balance and average weekly earnings figures are both scheduled for release. This will be followed by Friday's highly anticipated GDP and manufacturing PMI reports, which will serve as the final key releases before the September 6 BOC interest rate decision.

MXN

The Mexican Peso is once again in the green this morning, continuing its march towards the eight-year high it last tested on July 28.

This morning, Mexico posted a trade deficit of $0.88B, which is lower than the expected $1.677B deficit. Exports rose by 2.9% year-on-year, with a notable increase of over 35% in manufactured auto products. On the other hand, imports fell by 7.7%, driven by a sharp decrease of 50.8% in oil purchases.

Mexico's Q2 GDP data is expected to be released tomorrow, with markets forecasting a 3.7% year-on-year growth rate, matching the previous figure.

BRL

The Brazilian Real is stepping back this morning after recording its largest weekly gain against the Dollar since April.

According to the BCB's latest loan growth report, outstanding loans in Brazil decreased by 0.2% in July, marking the first contraction since January. This decline was primarily due to a 1.1% decrease in corporate credit, even though individual credit increased by 0.4%. From a year-on-year perspective, credit growth slowed to 8.2% from 9.2% in June.

Up next on the Brazilian economic calendar are PPI and wholesale prices, set for release this Wednesday, along with the unemployment rate on Thursday.

CNY

The Chinese Yuan is edging lower today as markets react to the announcement of various stimulus measures from Beijing and a disappointing industrial profits reading over the weekend.

China has revealed measures to curb the outflow of foreign investors, which includes slowing down the pace of IPOs and reducing the stamp duty on stock trades by half. This move led to a brief 5% surge in China's CSI 300 Index. However, the rally has since tapered off as traders await more substantial support to address the underlying economic challenges.

On the data front, profits of Chinese industrial firms declined by 15.5% year-on-year in the first seven months of 2023. This decline affected both state-owned and private firms, with 28 out of 41 industries reporting losses, including metals, petroleum, and chemicals.