USD

The Greenback has bounced off the lows and is nearing positive territory for the day as traders continue to assess yesterday's Fed decision while evaluating this morning's onslaught of US data alongside the latest ECB headlines.

As expected, the Fed delivered another 0.25% rate hike yesterday, taking US interest rates to their highest level since January 2021. While Fed Chair Powell did not dismiss the possibility of another rate hike in September, markets pricing indicates an 80% chance the Fed stands pat.

Earlier today, the US economy posted an impressive 2.4% growth rate in June, blowing past market expectations of a 1.8% expansion. Non-residential fixed investment and equipment led the surge, although consumer spending and net trade disappointed.

In addition, durable goods orders rose by 4.7% month-over-month, the most significant increase since July 2020, while initial jobless claims fell to 221K – a five-month low.

EUR

The Euro is in the red this morning after the ECB decided to increase rates by 0.25%, taking its main refinancing rate to 4.25% -the highest since October 2008.

In its monetary policy statement accompanying the decision, the ECB adjusted its language in a way that signaled they, too, may be nearing the end of their tightening cycle, sending bets on another hike in September tumbling. 

However, like the Fed, the ECB has not taken further rate hikes off the table.

Meanwhile, Germany's consumer confidence for August increased slightly, driven by improved expectations for both income and inflation. However, the overall economic sentiment remained low amongst those surveyed.

GBP

After gaining 0.3% against the Dollar yesterday, the British Pound is down over 0.35% today as traders react to the latest moves from the Fed and ECB, as well as some minor data points out of the UK.

According to this morning's CBI report, July's retail sales plummeted at their fastest monthly rate since April 2022, while expectations for August fell to their lowest level since January 2021, indicating the situation is trending in the wrong direction.

On the bright side, auto production in the UK remained strong in June, surging 16.2% year-on-year and increasing by 11.7% in the first half of 2023 alone.

JPY

The Japanese Yen received a boost from the market's reaction to yesterday's comments from Jerome Powell but is pulling back today in the leadup to the highly anticipated BoJ decision set to take place overnight.  

Prior to the BoJ, JPY traders will get a fresh look and Japan's inflation picture, with July's Tokyo CPI numbers set for release at 7:30 PM EST. Market expectations indicate headline inflation is set to fall to 2.8% year-on-year after coming in at 3.1% in June. On the other hand, core-CPI is expected to cool to 2.9% after posting a 3.2% rise in June.

CAD

The Loonie is up around 0.2% today thanks to a strong showing on today's Canadian earnings front, which has helped negate the effects of the strengthened Greenback this morning.

Average weekly earnings for employees rose 3.6% year-on-year in June, the highest increase since November 2022. 

While most sectors reported gains, with the biggest increases seen in forestry & logging and utilities.

Meanwhile, Canadian small businesses' optimism rose slightly in July, driven by notable improvements in financial services, information and recreation, and hospitality.  

Looking ahead, Canadian GDP is on deck tomorrow, with market expectations pointing to monthly growth of 0.3% in May.

MXN

The Mexican Peso is rallying over 0.6% today, building off yesterday's 0.5% gain against the Dollar and pushing back toward last week's highs as traders sort through today's unemployment and trade data out of Mexico.

Mexico's unemployment rate declined to 2.7% year-on-year, improving on the previous read of 2.9% and coming in less than the 3% market consensus. The seasonally adjusted rate also fell to 2.7% from the 3% seen in May.

On the trade front, Mexico surprisingly posted a small surplus of $38M in June compared to market expectations for a $7M deficit, marking its first surplus since March.

BRL

The Brazilian Real is up 0.6% this morning, higher for the second-straight day and guided by speculation that the Fed has reached the end of its tightening cycle.

BRL traders are also assessing the latest inflation data out of Brazil, which indicates producer prices have fallen for the 10th month out of the past 11. June PPI posted a 2.72% monthly drop, more than the expected 1.81 decline, although less than the 3.07% fall seen in May.

Looking ahead, net payrolls are set for release later today, where it is expected that the Brazilian economy will have added 164.5K jobs in June, improving on May's addition of 155.27K jobs.

CNY

After a solid start to the day, the Yuan has reversed course and now trades in the red after weak domestic data and today's massive US GDP beat weighed on the currency. 

Before this morning's US data releases, the Yuan rose to a two-week high in hopes that the Fed has delivered its final rate hike of this cycle.

Overnight, China's industrial firms experienced a notable 16.8% year-on-year decline in profits in the first half of 2023, further cementing the gloomy economic outlook. June alone saw profits sink 8.3% as demand continued to dry up.