USD

After posting its second-straight week of gains, the Dollar Index begins the day mostly unchanged as traders digest key inflation and GDP figures out of Europe. Despite the bounce back over the last couple of weeks, the Greenback is on pace for a second-consecutive monthly decline.

This week will be another busy one on the US calendar, with the ISM Manufacturing PMI scheduled for release tomorrow, followed by ADP employment change on Wednesday, ISM Services PMI on Thursday, and non-farm payrolls on Friday.

Although today's docket lacks any significant releases, the Chicago PMI is on deck later this morning as a potential preview of what's to come from tomorrow's ISM manufacturing PMI.

EUR

The Euro is rising this morning following an array of significant data releases from across the Eurozone as EUR/USD paces for its second-consecutive monthly gain.

The Eurozone annual inflation rate slowed to 5.3% in July, the lowest since January 2022, primarily due to a drop in energy prices, although services inflation continued to rise. Meanwhile, the Eurozone economy grew by 0.3% in Q2, surpassing expectations, but the annualized GDP growth was only 0.6%, the weakest since Q1 2021.

Elsewhere, Italy's inflation rate also cooled to 6% in July, while its GDP contracted by 0.3% in Q2, the worst since Q4 2020, and Germany's retail sales unexpectedly dropped by 0.8% in June, the first decline since March and far worse than market expectations of a 0.2% increase.

GBP

The Pound is modesty higher this morning and on pace for another monthly gain against the Dollar as cable traders size up the BoE ahead of its upcoming interest rate decision this Thursday. This morning's market pricing indicates a 0.25% rate hike remains the most likely outcome, although there is still more than a 30% chance assigned to a 0.5% increase instead.  

Earlier today, the June UK consumer credit report showed a substantial increase in borrowing, posting the highest monthly increase since April 2018, driven by car dealership finance and personal loans. However, the annual growth rate for all consumer credit remained unchanged at 7.6%.  

Meanwhile, net approvals for house purchases exceeded expectations and rose to an October 2022 high, while net borrowing of mortgage debt rose, as did the effective interest rates on mortgages.

JPY

The Yen is slipping this morning, down around 0.7% versus the Greenback but still comfortably in the green for the month as it looks to hang on for its first monthly gain since March. 

While still analyzing the implications of last week's BoJ decision to loosen its grip on yield curve control, JPY is sifting through the latest economic data out of Japan, including the latest retail sales report.

In June, Japan's retail sales rose 5.9% year-on-year, the 16th straight month of growth thanks in part to a surge in auto sales. However, on a monthly basis, retail sales declined by 0.4% in June, its second contraction in the past three months.

CAD

The Loonie is up over 0.25% this morning, pushing it into positive territory against the Dollar for July in a month where it has struggled to find direction.

With the Canadian calendar empty today, CAD traders will look ahead to key releases later this week, including July's S&P Manufacturing PMI scheduled for tomorrow morning, followed by Friday's double feature of July unemployment data and the latest Ivey PMI report.

Meanwhile, WTI futures are up nearly 1% this morning as black gold paces for its largest monthly gain since January 2022, boosting the commodity-linked Loonie.

MXN

The Mexican Peso kicks off the week slightly lower after last week's strong showing but is still well on track for its seventh-straight monthly gain versus the Greenback. Today's pullback comes as traders dissect the latest GDP printout of Mexico.

A preliminary read of Q2 GDP suggests Mexico's economy grew 0.9% for the quarter, in line with market expectations and marking the 11th quarter of expansion out of the past 12. 

From an annual perspective, the economy posted growth of 3.7% year-on-year, matching the previous read and beating the 3.4% expected by the market. 

BRL

The Brazilian Real is up over 0.15% this morning as BRL looks to extend its monthly winning streak against the Dollar to four.

With inflation in Brazil continuing to trend in the right direction and the economy continuing to display resilience, all signs are pointing to the BCB cutting interest rates this Wednesday, bringing an end to an aggressive tightening cycle that saw the Selic rate rise from 2% in early 2021 to the current 13.75%. Market pricing indicates a 60% chance of a 0.5% rate cut this Wednesday, with a 40% chance of a smaller cut.   

CNY

After beginning the day in the green, the Chinese Yuan is pulling back, heading into the North American session as markets reflect on the latest PMIs out of China.

China's NBS Manufacturing PMI rose to 49.3 in June, slightly better than expected but still marking the fourth consecutive month of contraction for the struggling sector. New orders, export sales, and employment continued to decline, while output and business sentiment showed some improvement.

Meanwhile, June's services PMI fell to 51.5, the fourth-straight month of slowing growth, although it was also the seventh-straight month of expansion in the sector.