On the economic front the week is starting to heat up with Durable Goods and a few sentiment indices ahead. Durable Goods Orders in the US declined by 6.1%, or $18 billion, to $276.7 billion in January, the Census Bureau just reported. This reading followed the 0.3% decrease recorded in December and came in worse than the market expectation for a contraction of 4.5%.

Markets already heard Kansas City Federal Reserve Bank President Jeffrey Schmid, who said that the Fed should be patient and not adjust its policy preemptively. Later today Michael Barr and Fed’s Vice Chair will make comments as well. US Treasury Secretary Janet Yellen said on Tuesday that she considers the global outlook to be "quite favorable" but added that there are always risks, per Reuters.

EUR/USD retreats a few pips from a three-day high touched during the mid-European session. The downside remains cushioned in the wake of diminishing odds for rapid rate cuts by the ECB. President Lagarde’s comments yesterday showed ongoing patience, suggesting that the ECB “needs to be confident that the current disinflationary process will lead us sustainably to our 2% target”.

GBP/USD is stuck in a narrow range to start the session as investors seek fresh economic triggers that could provide insights into the timing of rate cuts by the Bank of England. Bank of England Governor Andrew Bailey said that he would not forecast how many cuts there would be, but the bank was on a path toward lowering rates.

USD/CAD is relatively flat on the day. Crude oil has attracted some buyers for the second straight day in the wake of growing concerns about supply disruptions in the Middle East, led by persistent attacks by Iran-aligned Houthis on commercial vessels in the Red Sea. This, in turn, is seen underpinning the commodity-linked CAD which, along with the prevalent selling bias around the US Dollar puts downward pressure on the pair.