Markets are starting the day on the back foot as equities are lower while the USD and US Treasury yields are higher. Cleveland Fed president Loretta Mester, a non-voter, said yesterday that the Fed will likely need to hike rates one more time and keep them higher for longer, a common theme that’s evolved ever since the previous FOMC decision and press conference. The US 10-year treasury yield continues to march higher, knocking on the door of the 5% level, and this, in turn, is what is driving USD strength across pairs. The day's highlights will be the US JOLTS Job Openings release at 10 a.m. EST and a speech by Atlanta Fed President Bostic. 

EUR/USD remains in the mid-1.0400 handle, reaching levels not seen since December of last year. ECB Governing Council member Simkus said the ECB must keep interest rates restrictive until inflation returns to the 2% target. 

USD/CAD breached 1.3700 and continues to hover in that vicinity. This is the weakest the Loonie has been against the USD since March of this year. Deputy Bank of Canada Governor Vincent said there's a risk that efforts to lower inflation to their 2% target will be complicated by continued pressure of higher prices. On the political front, tensions between Canada and India continue as 41 Canadian diplomats have been instructed to leave the country by Indian officials.  

GBP/USD is flirting again with the 1.2000 handle, levels not seen since March of this year, as poor manufacturing data yesterday combined with the previous BoE decision to pause has raised questions about how much more hawkish policy can be going forward. 

USD/MXN continues to march higher, approaching its 200-day moving average for the first time in a year. For context, however, it is worth noting that current levels are approximately only 0.6% higher than the lows seen in July, which are the strongest the pair has been since 2015. 

USD/BRL is slightly higher on the day while the market continues to digest the pair, having firmly crossed its 200-day moving average recently. Industrial production figures released this morning show an uptick in activity versus the prior reading but short of analyst expectations.