The U.S. dollar continues to assert its dominance this morning, gaining strength against the euro and sterling while showing slight weakness against the Canadian dollar. Heightened geopolitical tensions in Europe, alongside shifting inflation expectations in Canada, have shaped the markets today. Here's a breakdown of the key movements:

EUR/USD The euro has fallen by 0.22% against the U.S. dollar, largely driven by increased market focus on the escalating tensions between Russia and Ukraine. With European stocks under pressure, investors appear to be favoring the U.S. dollar as a safe haven, further weighing on the euro.

GBP/USD Sterling has declined by 0.3% against the dollar, also reflecting the geopolitical risk premium tied to Europe. The stronger greenback, fueled by risk-off sentiment, has kept the pound on the back foot in early trading.

USD/CAD The Canadian dollar has strengthened slightly, with USD/CAD slipping by 0.07% this morning. This move follows Canada’s latest inflation data, which showed inflation ticking back to 2%, the higher end of the Bank of Canada’s target range. Markets are now pricing in a more measured approach to rate cuts, with expectations shifting to a 25-basis-point reduction rather than the previously anticipated 50 points. This outlook is reducing the U.S. dollar’s advantage over its Canadian counterpart.

Market participants will be closely watching developments in Europe and any additional commentary from central banks, particularly the Bank of Canada, as inflation remains a key driver of monetary policy decisions.