The U.S. Dollar is modestly lower against most of its G10 counterparts overnight.
Overview
Equity futures are solidly in the green this morning, dampening demand for the safe haven. Overall, the dollar has held mostly tight ranges this week ahead of inflation data that will likely spark volatility tomorrow morning. The consumer price index is expected to show the fastest inflation in decades. A higher reading could add bets that the Federal Reserve will raise rates by 50 basis points next month. It is our view that the central bank will only hike 25 basis points.Cleveland Fed President Loretta Mester and Fed Governor Michelle Bowman are slated to speak later this morning. As with all Fed speakers, market participants will parse their words for clues as to the Fed’s thinking on future monetary policy. There is no top-tier data on today’s docket.
What to Watch Today…
- No major economic events are scheduled for today
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EUR
The Euro has not moved a ton after it was established since last week that the European Central Bank has less focus on staying loose indefinitely in their policy and application. The situation between Russia and the EU remains worrisome, but Ukrainian leadership has stated that feel confident peace will remain.
Although some progress was expected following some dialogue led by France’s Emmanuel Macron, Russia’s Vladimir Putin said he wants a deal that he drafted for Ukraine.
CAD
The Canadian Dollar is up a touch against the U.S. Dollar this morning. The move is likely more due to the greenback’s weakness than the Loonie’s strength. Indeed, the Loonie is lower versus much of the G10 board this morning as falling oil prices weighed on the currency. WTI fell 0.4% representing a third straight decline. Perspective is important as WTI gained for the sixth consecutive days before the recent pullback.Bank of Canada Governor Tiff Macklem is scheduled to speak at noon today. The BoC is widely expected to raise rates in March for the first time since October 2018. We do see room for CAD strengthening short-term as well as long-term if economic indicators keep rising.
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