The USD would post its 3rd straight daily decline yesterday following Atlanta Fed President Bostic pushing back on rate cuts the prior day, fueling similar expectations for Fed Chair Powell during his testimony before Congress today. Adding to the pressure, data showed the US service sector cooled in February, partly due to a decline in employment category despite the pace of orders and business activity rising. The Democratic and Republican Super Tuesday primaries last night brought both Trump and Biden sweeping victories, as expected.

US ADP employment change data misses estimates this morning (140k vs 150k expected), with the JOLTS employment release coming at 10AM. The USD is down 0.2% today, with attention fixed on Powell’s testimony to the House Financial Services Committee later this morning.

EUR/USD closed yesterday flat and is up 0.2% today, trading near 2-week highs. Eurozone aggregate retail sales data overnight slightly misses estimates. Investors eagerly await tomorrow’s ECB rate decision (8:15AM, expectation for no change in rates) for updated clues on the ’24 rate path

GBP/USD rose 0.1% yesterday and has seen similar gains thus far today. With the next general election needing to be held by January 2025, the current Administration’s Spring Budget release today is likely the last of any major economic policy changes. The next key data comes with next Tuesday’s employment releases, where wages will be in focus. The BOE rate decision is just over 2 weeks away.

USD/CAD is lower this morning, in-line with broader USD price action, after trading near 3-month pair highs. Q4 Labour productivity data this morning beat expectations (0.4% q/q versus 0.2% expected), with hourly wages rising 0.3% (0.9% prior). Investors await the 9:45AM Bank of Canada rate decision for any fresh language around the rate cut path for 2024. The BOC is expected to hold the main policy rate steady at 5%.

USD/JPY has dropped nearly 0.8% over the last two days as souring risk sentiment drove haven demand for the Japanese Yen. Adding to Yen strength are reports of Bank of Japan officials gaining confidence in the strength of wage growth, growing the debate around whether the BOJ exits its negative policy rate in March or April.