The U.S. dollar is trading sideways today, primarily influenced by political factors. All eyes are on the upcoming debate between former President Donald Trump and Vice President Kamala Harris, which could significantly impact the race for the White House. This is likely to be the only direct confrontation between the two candidates. Trump has recently gained ground in the polls following the Democratic National Convention.

On the economic front, today's calendar offers little in terms of market-moving data. Even a speech by Federal Reserve Vice Chair for Supervision Michael Barr is unlikely to have a significant impact, as the Fed is currently in a blackout period ahead of its Federal Open Market Committee meeting on September 17 and 18. Barring any major news or comments, markets are expected to have a relatively quiet day.

EUR/USD is trading flat. The euro is showing limited movement as investors focus on the European Central Bank's interest rate policy decision, which will be announced on Thursday. The ECB is widely expected to cut interest rates by 25 basis points, marking the second rate cut in its current easing cycle. Despite the confidence in the ECB's resumption of easing, market participants will closely watch the monetary policy statement and ECB President Christine Lagarde's press conference for clues about future policy actions. Lagarde is anticipated to provide dovish guidance, given Germany's inflation rate returned to the ECB's target of 2% in August and the country's economic vulnerability due to weak demand.

GBP/USD is lower to start the session. The UK's Office for National Statistics reported that the ILO Unemployment Rate decreased to 4.1% in the three months to July, as expected. Employment Change increased sharply to 265K, while annual wage inflation declined to 5.1%. The U.S. economic calendar will not feature any high-impact data releases today. On Wednesday, the U.S. Bureau of Labor Statistics will release the Consumer Price Index for August.

USD/CAD is trading flat within a narrow range. Bank of Canada Governor Tiff Macklem is expected to provide guidance on potential monetary policy actions in the fourth quarter. Given the Canadian economy's challenges due to weak demand, Macklem's guidance is likely to be dovish. The Canadian Unemployment Rate rose to 6.6% in August, exceeding expectations. The BoC has already cut interest rates by 75 basis points since June and is anticipated to implement further cuts to stimulate economic growth.