The USD would pare gains after a boost from above-forecast June retail sales data yesterday, closing the day marginally lower. Goods spending rebounded, though results for discretionary spending categories were less impressive than categories whose prices have fallen recently. Prior readings for May were upwardly revised. Implied swap odds for the September 18th Fed rate decision rate remain beyond fully priced for a 25 basis-point cut. Gold prices set fresh all-time highs yesterday, extending gains into today.

The USD is under broad selling pressure this morning, trading weaker against the entirety of the G10 space as we enter the North American session. After endorsing a strong-dollar policy last week in the RNC’s party platform US Presidential front-runner Trump, in an interview with Bloomberg Businessweek, stated “we have a big currency problem because the depth of the currency now in terms of strong dollar/weak yen, weak yuan, is massive.” USD/JPY responded with a drop of nearly 1.5% overnight, reaching lows last seen on June 12th. Trade volumes of the move indicate it is unlikely that the BOJ intervened.

EUR/USD closed marginally higher yesterday and is up 0.35% today, trading about % higher than this time last week. CPI data showed that yearly inflation declined to 2.5% from a prior that was revised upwards 0.1% to 2.6%. Services inflation continued to show its stickiness in this report and will no doubt be of note to ECB officials, who make their rate decision tomorrow. Market implied odds of a rate cut tomorrow are negligible, with the September decision date remaining priced above 80%.

GBP/USD similarly closed marginally higher yesterday and is up 0.45% today, trading roughly 1.75% higher than this time last week. The pair is currently trading at 1-year highs. CPI data came in above-forecast with the yearly headline (2.0%) and core (3.5%) measures failing to fall from the prior month’s reading. Sticky services inflation was a similar story, matching its prior reading and potentially raising the bar for an August 1st policy easing move. Implied odds before the inflation data release was nearly 50%, and has declined to 37% after the data. Employment data is released tomorrow.

USD/CAD closed marginally lower yesterday and is essentially flat this morning, underperforming the G10 space. The pair is trading about 0.35% higher than this time last week. On a monthly basis, headline inflation fell 0.1% versus a forecast of a 0.1% gain yesterday. Headline yearly inflation has now been under the BOC’s upper target band of 3% for 6 straight months. A year-over-year headline reading of 2.7% marks the lowest level since April of 2021. Odds of a rate cut at the July 24th BOC rate decision rose to 90% from 80% before the inflation report.