The USD rose 0.15% yesterday, approaching its three-week high. Haven currencies, such as the JPY and CHF, outperformed amid a selloff in bank stocks following the Federal Reserve's regulatory chief outlining plans to increase bank capital requirements. Technology stocks surged, boosting US equity indices, while US 10-year yields declined by 6 basis points. Crude oil prices fell 3.6% due to concerns about oversupply and weakening global demand. Betting markets favored US Presidential candidate Harris after last night's debate.

Today's US CPI data aligned with expectations, including a 0.4% year-over-year decrease in the headline measure to 2.5%. Only the monthly core measure exceeded expectations slightly. Following the CPI release, the USD strengthened slightly, up 0.2%, but remained marginally lower for the day. Implied odds of a larger Fed rate cut have decreased modestly.

EUR/USD declined by 0.15% yesterday and is currently flat. It is trading 0.35% lower compared to last week. The ECB rate decision is scheduled for tomorrow, with a 25 basis-point policy rate reduction fully priced in. The ECB is also expected to narrow the gap between the deposit and main refinancing policy rates from 50 to 15 basis points. These wider spreads are a legacy of the eurozone's era of negative borrowing costs.

GBP/USD closed essentially flat yesterday and is 0.1% lower today, trading about 0.45% lower than last week. Yesterday's data showed that wage gains cooled to a two-year low in the three months ending July. Moderating wage growth supports the BOE's path for further monetary easing this year. A rate cut at the upcoming BOE meeting remains priced at a sub-20% level, with the November meeting fully priced for a rate reduction.

USD/CAD rose 0.4% yesterday but is 0.15% lower today, trading approximately 0.3% higher than last week. The more risk-correlated CAD underperformed amid broader risk-off sentiment and declining crude oil prices. Investors are awaiting key inflation data on Tuesday.

USD/JPY erased its year-to-date gains, falling as much as 1.7% over the past two days. Haven demand for the Yen pushed the pair lower yesterday, while a report overnight indicating a BOJ board member's support for continued policy adjustments drove further Yen gains. Board member Nakagawa stated, "I believe that the degree of monetary easing will be adjusted if the outlook for Japan's economy and inflation is realized." He added, "The current level of real rates is extremely low."