The US Dollar is extending its losses from Monday against most major currencies, with all eyes on the Federal Reserve's Jackson Hole Symposium in Wyoming. Fed Chair Jerome Powell's speech will be a pivotal event. A combination of risk-on sentiment and a sparse data calendar leading up to Jackson Hole has convinced traders that a recession can be avoided and the US economy is on track for a soft landing. Additionally, news of Israel's potential commitment to a US ceasefire proposal is reducing safe-haven demand for the Greenback.

The economic data calendar remains light, warranting caution. Given the factors aligning for a weaker US Dollar, any news or data could trigger a sharp reversal of Monday's gains. With nearly all Fed members having already shared their interest rate outlook ahead of Powell's speech on Friday, there's potential for continued market volatility.

EUR/USD is trading higher, reaching new 2024 highs. Following the US CPI release, expectations for a half-point Fed rate cut in September diminished, with a smaller cut now more likely. This view is supported by strong US economic data. While the European Central Bank remains quiet, Fed policymakers are offering insights ahead of the September meeting. Minneapolis Fed President Neel Kashkari suggested the possibility of rate cuts in September due to a potential weakening labor market. However, the US economy is expected to outperform Europe in the long term, which could limit the US Dollar's weakness.

GBP/USD is also higher, reaching a new monthly high. While UK service sector inflation slowed sharply, it's still insufficient to compel the Bank of England to aggressively cut interest rates. This easing inflation does open the door for potential rate cuts, but investors will focus on BoE Governor Andrew Bailey's speech at Jackson Hole for clearer guidance on the interest rate path. His comments on wage growth and potential inflationary pressures will be closely watched.

USD/CAD is lower due to overall US Dollar weakness. Canadian CPI matched expectations, rising 2.5% year-over-year in July. Core CPI increased 0.3% month-over-month, while the Bank of Canada's Core Consumer Price Index rose 1.7% year-over-year, slightly lower than June's figure.