USD

After experiencing three consecutive days of losses, the Greenback has risen by over 0.3% this morning, following a double dose of US and European inflation figures earlier today.

US Core PCE prices saw a 0.2% month-over-month increase in July, consistent with June's reading and market expectations. Additionally, the year-on-year rate inched up slightly from 4.1% to 4.2%. The index showed a 0.2% month-on-month increase and a 3.2% annual increase when factoring in food and energy costs.

Meanwhile, initial jobless claims for the week ending August 26th totaled 228K, slightly lower than the expected 235K. On the other hand, continuing claims were recorded at 1.725M, compared to the market anticipation of 1.703M.

EUR

The Euro is experiencing a sell-off today as traders assess another substantial wave of critical data releases from both Europe and the US in the morning.

In August, the Eurozone witnessed an annual inflation rate of 5.3%, surpassing the market's initial expectations of 5.1%. Energy prices exhibited a slower decline than in June, while inflation decelerated for categories including food, alcohol, tobacco, non-energy industrial goods, and services. Additionally, France's Consumer Price Index (CPI) ascended to 4.8%, exceeding the market's projected figure of 4.6%. This increase can primarily be attributed to rising energy prices. Conversely, Italy's CPI decreased to 5.5%, even though there were notable increases in food and energy prices.

On the employment front, the Eurozone's unemployment rate remained at a historic low of 6.4%, with Germany registering the lowest jobless rate at 2.9%. This stands in contrast to higher rates in Spain, Italy, and France.

GBP

The British Pound has declined by over 0.3% today, following three consecutive days of gains, as markets respond to the latest US and European inflation reports.

On the domestic front, UK car production has increased by 31.6% year on year, marking the sixth consecutive month of growth. However, it still remains significantly below pre-pandemic levels. Output for domestic buyers has grown by 13.7%, while exports have surged by 36.1%, primarily to the EU, the US, China, Japan, and Australia.

Meanwhile, BoE Chief Economist Huw Pill has affirmed the bank's commitment to reducing high inflation to its 2% target, despite potential risks to the UK's economy.

JPY

After experiencing a 0.25% decline yesterday, the Japanese Yen is making gains against the Dollar this morning as traders evaluate Japan's most recent retail sales and housing figures.

Retail sales experienced a surge of 6.8% year on year in July, marking the 17th consecutive month of growth. Various retail sectors saw differing levels of growth, with other retailers leading at 11%, followed by auto retailers at 8.1%. Conversely, monthly sales also saw a rise of 2.1% following a 0.4% dip in June.

Turning to the housing sector, housing starts underwent a significant decline of 6.7% year on year in July, marking the fifth instance of new construction starts retracting this year.

CAD

The Loonie is fluctuating between gains and losses as it approaches the Wall Street opening, following a robust two-day rally against the Greenback. Today's movements in USD/CAD coincide with CAD traders preparing for two crucial data releases from Canada scheduled for tomorrow.

In June, the annualized growth rate of average weekly earnings for Canadian non-farm payroll employees remained steady at 3.6%. This growth was primarily driven by the information and cultural industries sector, as well as the management of companies and enterprises sector. Among the provinces, Nunavut and Newfoundland and Labrador experienced the highest earnings growth.

Looking ahead to tomorrow, Canada's Q2 GDP is scheduled for release at 8:30 AM EST, followed by the Canadian manufacturing PMI for August at 9:45 AM EST. 

MXN

The Mexican Peso is slightly higher today, following a 0.3% gain against the Dollar yesterday, as MXN traders analyze the latest unemployment data from Mexico. Currently, the Peso maintains a narrow positive position for August, aiming to secure its fourth consecutive monthly gain.

In July, Mexico's unemployment rate reached 3.1%, surpassing market expectations of 2.8%. The number of unemployed individuals decreased to 1.9 million, while the employed population increased to 59.5 million, resulting in a participation rate of 60.9%. On a seasonally adjusted basis, the jobless rate rose to 2.9% month-on-month.

BRL

After experiencing a 0.8% decline against the Greenback yesterday, the Brazilian Real has rebounded today following the release of this morning's unemployment and fiscal budget reports from Brazil.

In the three months leading up to July, Brazil's unemployment rate averaged 7.9%, marking the lowest figure for 2023. This demonstrates resilience in the job market despite high interest rates. Throughout this period, the number of unemployed individuals decreased by 573,000, while the count of employed individuals increased by 1.3 million.

Meanwhile, Brazil's budget deficit for July amounted to BRL 81.9 billion, significantly surpassing the anticipated BRL 73.5 billion. Additionally, Brazil's gross debt escalated to 74.1% of GDP, representing the highest level since November 2022. 

CNY

The Chinese Yuan is experiencing a surge today, although it remains on track for its fourth monthly decline out of the past five months, as ongoing domestic economic concerns continue to exert downward pressure on the currency.

On the data front, China's composite PMI exhibited a slight improvement, reaching 51.3 in July. Factory activity contracted at the slowest rate since March, potentially aided by stimulus measures. The official manufacturing PMI also saw improvement, rising to 49.7. This increase reflects higher output and new orders, despite the persisting decline in employment and the rise in input costs. However, the sector still demonstrated contraction for the fifth consecutive month. Conversely, the non-manufacturing PMI decreased to 51.0, indicating a slowdown in the service sector due to contracting new orders and foreign sales.