USD

After posting its best single-day gain in three weeks, the Dollar Index is in the green again this morning, following the latest US jobs and manufacturing reports.

The latest data revealed that last week's initial jobless claims came in at 228K - a two-month low and below market expectations. However, there was a noteworthy increase of 33K in continuing claims, totaling 1.754M, marking the most significant jump in three months.

Meanwhile, the Philadelphia Fed Manufacturing Index remained at -13.5 in July, indicating a continued decline in regional manufacturing. While new orders and shipments were negative, the ongoing six-month index continues to tick higher, which is a positive sign for the future.

EUR

The Euro is down on the day as Wall Street gets set to open. Today's moves in EUR/USD come as traders review the latest US and European economic data.

In June, Germany's producer price inflation was 0.1% year-on-year, the lowest rate since December 2020, mainly due to a 5% decrease in energy prices. Excluding energy, producer prices grew by 2.8%. On a monthly basis, producer prices fell 0.3% in June, marking eight months of deflation out of the past nine.

Additionally, France's manufacturing climate indicator remained stable at 100 for July, in line with market projections. There were improvements seen in past production and finished goods inventory, but expectations for general production and the workforce were reduced.

GBP

The Pound is down nearly 0.6% this morning, following four consecutive sessions of declines, including yesterday's 0.74% drop, against the Dollar.

Following yesterday's softer-than-expected UK inflation data, GBP/USD has been under pressure, which caused traders to rethink how aggressive the BoE would be with its future rate hikes.

In early July, the market consensus indicated that the BoE could take rates above 6.5%. However, since yesterday's inflation numbers were released, peak rate expectations have been revised down to around 5.75%.

However, despite the slowdown, UK inflation remains well above that of its G7 counterparts, not to mention the BoE's 2% target. This suggests that an end to the tightening cycle is not yet imminent.

JPY

After posting a 0.57% loss against the Greenback yesterday, marking its fourth-straight losing day, the Yen is inching lower again today as traders digest the latest data from the US and Japan.

Japan's trade dynamics surprised with a surplus in June, ending the preceding 22-month streak of deficits. Annualized export growth of 1.5% was underpinned by robust demand for transport equipment, while imports contracted sharply by 12.9%, primarily due to significant declines in purchases of mineral fuels and electrical machinery. This marks Japan's third consecutive monthly decline in imports and the most substantial monthly contraction since September 2020.

CAD

The Loonie is riding a three-day winning streak against the Dollar as it kicks off the North American session. It is in the green again this morning after US and Canadian data release.

The Employment Insurance Beneficiaries Change indicator showed a 2.5% increase in Canadians receiving unemployment benefits in May – a significant rise compared to the 0.5% decline in the previous month.

Meanwhile, Canada's Teranet house price index increased by 2.2% on a seasonally adjusted basis and 2.6% on a non-seasonally adjusted basis, marking the fourth consecutive monthly increase.

Looking ahead, Canadian retail sales are set for release at 8:30 AM tomorrow. Sales are expected to have increased by 0.5% in May, following a 1.1% rise in April.

MXN

The Mexican Peso retested a 7.5-year high yesterday but once again found itself turning back as sellers stepped in. The release of US jobs and Mexico's retail sales figures didn't help the Peso, which is back in the red this morning.

Mexico's retail sales fell by 0.5% in May, surprising the markets as consensus forecasts pointed to a 0.3% rise for the month. Meanwhile, year-on-year retail sales also missed expectations, coming in at 2.6% versus an expected increase of 3.5%.

Up next on the calendar is an important mid-month look at inflation in Mexico, which is slated for release Monday morning. MXN traders continue to try and gauge when Banxico is ready to begin easing rates.

BRL

The Brazilian Real is higher on the day, following yesterday's 0.4% gain against the Greenback – its first gain of the week. With another quiet day on the economic calendar, BRL traders will keep tabs on the latest earnings reports from major Brazilian corporations.

Yesterday, Vale, a major Brazilian mining company, posted an impressive 6.3% rise in Q2 iron ore production, although its stock still closed 0.3% lower. Conversely, WEG, a prominent Brazilian motor maker, reported an eye-opening 50% year-on-year surge in net profit, sending its shares 5% higher.

Meanwhile, Brazilian President Lula Da Silva revealed intentions to submit a counter-proposal for the delayed Mercosur-EU trade deal in the next two to three weeks, expressing hope for an agreement later this year.

CNY

The Yuan is surging in the offshore market this morning, up around 0.8% against the Dollar in the aftermath of the PBoC's announcement to ease cross-border financing restrictions and a fresh round of USD/CNH selling by state-owned banks in China.

In a significant move, the PBoC has raised the foreign fundraising ratio for private firms, enabling companies to access more USD offshore credit. This move aims to discourage businesses from buying USD in the spot market at the expense of the Yuan.

Meanwhile, despite the recent string of disappointing economic data, the PBoC decided to stand pat on interest rates and keep their one-year LPR (Loan Prime Rate) at 3.55%. This decision came after electing to cut rates by 0.1% at their June meeting.