The USD rose 0.25% yesterday, led by gains against CHF and JPY. The Swiss National Bank surprised markets by lowering its policy rate by 25 basis points, citing better progress on underlying inflationary pressures than in the previous quarter. The Norwegian central bank held its benchmark policy rate unchanged, as expected, indicating that they will likely need to maintain rates through the end of the year.

Trading mixed overnight, the USD enters today’s North American session roughly flat compared to yesterday’s close, heading for its 5th straight weekly advance. US PMI data beat expectations, with the services activity PMI expanding by the most in over two years.

EUR/USD fell 0.4% yesterday and was nearly 0.2% higher overnight before disappointing PMI data swung the pair to losses. The pair is now down about 0.2% after the US PMI data highlighted the divergence in the two economies’ activities. The composite PMI reading came in at 50.8 versus expectations of 52.5. Significant underperformances were notable in the German and French PMIs, with the French election seen weighing on euro-area manufacturing. Next week’s data slate is quite light, featuring consumer confidence and CPI expectation data.

GBP/USD closed nearly 0.5% lower yesterday after the dovish-leaning BOE decision and is down nearly 0.2% today. A dovish tilt was inferred from the BOE rate decision after some voting members indicated they might support a vote for a rate cut soon, despite recent topside services inflation data. Retail sales data this morning handily beat expectations, while PMI data was mixed. The August BOE decision is currently two-thirds priced for a rate cut (one-third odds prior to yesterday’s BOE decision), and the September decision date is 90% priced.

USD/CAD fell 0.15% yesterday and has recovered most of that this morning, trading about 0.5% lower than this time last week. March headline retail sales data met expectations while beating the consensus for the ex-autos retail sales measure. Prior month readings were revised lower. Industrial product and materials price data both came in below their forecasted levels. Both CPI (Tuesday) and GDP (Friday) data releases come next week. Implied swap odds have remained steady this week at just over 60% for the July BOC decision date.

USD/MXN has fallen nearly 1.2% over the past 2 days, the peso buoyed by the appointment of a more market-friendly leader for the economy ministry. The pair is over 4% lower than its year-to-date highs seen on June 12th. Economic activity data this morning showed a decline beyond expectation in April, though the year-over-year measure beat forecasts.