Initial price action to US data releases yesterday dropped the USD after PCE inflation data failed to materialize higher, coming in at expectation. After falling as much as 0.25% post-release, the USD would recover to end the day higher. On a television appearance yesterday Federal Reserve Bank of San Francisco President Daly echoed recent Fed sentiment in terms of a patient approach to eventual rate cuts, stating “I see a lot of green shoots, as we like to say, but we’re not there yet.” Atlanta Fed President Raphael Bostic sees “bumps along the way” to the Fed’s inflation goal and remains of the view that a summer move on rates is likely appropriate.

This USD is marginally higher this morning ahead of manufacturing PMI, Michigan Sentiment, and ISM manufacturing data releases. The Fed's Barkin is currently speaking on CNBC, while the Fed's Waller and Logan will speak at the US Monetary Policy Forum later this morning.

EUR/USD was down 0.3% yesterday but was trading slightly firmer overnight after year-over-year inflation measures came in higher than expected (core CPI 3.1%, 2.9% expected, 3.3% prior). The data is roughly in line with the narrative that while price pressures are receding, the pace of easing is slower than previously anticipated. Attention turns to the ECB rate decision Wednesday March 7th.

GBP/USD price action over the last day has largely mirrored the Euro, with overnight firming in the pair reversing into the North American open to yesterday’s close levels. Housing prices and manufacturing PMI data beat estimates overnight. BOE Chief Economist Huw Pill speaks today with attention shifting to the UK budget release next week.

USD/CAD ended yesterday essentially flat and is slightly higher this AM as the pair heads for its 3rd straight weekly gain. Canadian growth data yesterday surprised to the upside in Q4, with Q3 revised higher to reflect a lighter contraction than previously reported. Investors eye the BOC rate decision next week on March 6th.