The USD declined by 0.5% yesterday following China's announcement of a comprehensive stimulus plan, which boosted global risk sentiment. Softer-than-expected US consumer data also contributed to the greenback's decline. Federal Reserve Governor Bowman, the sole dissenter at the previous rate decision, advocated for a "measured" pace of policy easing due to persistent inflationary risks and a relatively unchanged labor market. Most Fed officials have recently assessed the risks to the Fed's dual mandate as roughly balanced or leaning towards employment.

The USD briefly reached new eight-month lows overnight before recovering to gain 0.2% today. Chinese authorities unveiled additional measures to stimulate growth, including the largest-ever reduction in the one-year policy loan rate. The Swedish central bank implemented an expected 25 basis-point rate cut this morning, adopting a dovish stance that suggests further easing moves and increases the likelihood of a more significant cut. The Czech central bank also lowered rates as anticipated. Federal Reserve Governor Kruger is scheduled to speak later today. The final reading of US Q2 GDP and the quarterly PCE price index are due for release tomorrow morning. The Bank of Mexico is set to announce its rate decision tomorrow, with expectations for a 50 basis-point cut rising after inflation decelerated more than anticipated.

EUR/USD appreciated by 0.6% yesterday and is 0.2% higher today, trading approximately 0.6% above its level from last week. Germany's business outlook deteriorated yesterday as the IFO Institute's gauges missed forecasts, including an expectations component at its lowest level since February. The eurozone's weakening economic outlook has led to a surge in the odds of a rate cut at the upcoming October 17th ECB meeting, from 25% on Friday to 60% currently. ECB President Lagarde is scheduled to speak tomorrow.

GBP/USD rose by 0.5% yesterday and is slightly lower today, trading approximately 1.25% higher than last week. The pair has reached its highest levels since March 2022. The OECD upgraded UK growth forecasts for the next two years more than any other G7 nation, characterizing recent growth data as "relatively robust." The same report also indicated that the UK will face the most challenging task in returning inflation to the 2% target. The Bank of England's Greene echoed Governor Bailey's call for a gradual approach to interest rate cuts while suggesting that upside risks to activity persist and that current policy may not be as restrictive as previously thought. The final Q2 GDP reading is due on Monday.

USD/CAD declined by 0.8% yesterday and is marginally higher today, trading 1.15% lower than last week. The CAD has outperformed other G10 currencies as Chinese stimulus boosted commodity prices and broader risk sentiment. In a speech yesterday, Bank of Canada Governor Macklem stated that policymakers aim to maintain inflation close to the center of the 1% to 3% inflation-control band, emphasizing the need for further progress on core inflation measures and shelter prices. He also cautioned that growth may fall short of the BoC's expectations in Q3. July GDP data is scheduled for release on Friday.