USD

The Dollar is on the decline this morning in the aftermath of the latest US GDP and jobs reports. The US economy grew by 2.1% in Q2, slightly lower than the preliminary reading of 2.4%. The downward revision was primarily due to lower private inventory and non-residential fixed investments, although state and local government spending was revised higher.

On the jobs front, ADP reports that the private sector added 177K jobs, which is below the expected 195K. The majority of job growth was observed in the service sector, including education, healthcare, and leisure. Additionally, the manufacturing and construction sectors also experienced notable job gains.

EUR

After posting its largest single-day gain since July 13 yesterday, the Euro is back in the green today as markets react to the heavy slate of European and US data this morning.

Germany's inflation rate cooled slightly to 6.1% in August, slightly lower than in July but still well above the ECB's target. In addition, core inflation held steady at 5.5%.

In Spain, annual inflation rose to 2.6% in August, driven by higher fuel prices and a slight increase in electricity costs. Core inflation, on the other hand, eased to 6.1%.

Finally, the Eurozone economic sentiment indicator fell to its lowest point since November 2020, as high interest rates and inflation led to declining morale.

GBP

The British Pound has risen by over 0.5% today following the release of the latest batch of UK and US economic data this morning. UK consumer credit increased by GBP 1.191 billion in July, with reductions observed in car dealership financing and personal loans. Credit card borrowing remained steady, resulting in a decrease in the annual growth rate to 7.3%, compared to 7.5% in June.

Meanwhile, net borrowing of mortgage debt in the UK rose to GBP 0.2 billion, marking the third consecutive monthly increase. This was accompanied by a slight rise in effective mortgage rates and a decrease in both gross lending and repayments. Additionally, net approvals for home purchases declined, while refinancing approvals increased.

JPY

After a 0.45% gain yesterday, the Japanese Yen is slightly weaker against the Greenback today in response to this morning's US GDP and jobs data, along with comments from BOJ Board Member Naoki Tamura. Tamura suggested that Japan's inflation is nearing the BOJ's 2% target, raising the possibility of ending negative interest rates in early 2024, while emphasizing the importance of normalizing policy as soon as economic conditions permit.

On the data front, Japan's consumer confidence unexpectedly declined in August, dropping to 36.2 from the 37.1 recorded in July, as sentiment deteriorated across all components.

CAD

The Loonie is inching higher this morning following yesterday's 0.35% gain against the Dollar, its best day since July 31.  

Meanwhile, crude oil prices are slightly higher today ahead of the EIA Crude Oil stockpiles report at 10:30 AM today. The American Petroleum Institute projects US stockpiles will post an 11.5M barrel decline, the sixth reduction in the last seven weeks.

Looking ahead to tomorrow, Canada's Q2 current account read is scheduled for release at 8:30 AM EST, where it is expected to post a CAD 11.2B deficit, its steepest since Q3 2020, indicating an increase in net capital outflows out of Canada. 

MXN

The Mexican Peso is in the green today as traders continue to assess yesterday's GDP figures out of Mexico and the latest US data this morning. With the latest moves, the Peso has nearly erased its losses for August as it looks to secure its fourth-consecutive winning month.

MXN traders will be keen to see tomorrow's unemployment report out of Mexico, which is projected to come in at 2.8% in July, slightly above the 2.7% seen in June but still hovering at 20-year lows, emphasizing the resilience of Mexico's labor market despite record-high interest rates. 

BRL

The Brazilian Real is slightly higher this morning following the release of the latest inflation and net payrolls data from Brazil today. Producer prices in Brazil declined by 0.8% month-on-month in July, marking the sixth consecutive monthly decrease, primarily driven by a sharp drop in consumer goods prices. On a yearly basis, the PPI fell by a record 14.1%. Additionally, in August, the IGP-M decreased by 0.14% from the previous month, representing the fifth consecutive period of deflation.

Lastly, Brazil added 142.7K jobs in July, surpassing expectations and continuing a streak of seven consecutive months of job growth, albeit with a slight decline compared to June. 

CNY

After registering a 0.15% gain against the US Dollar yesterday, the Chinese Yuan is retracing today as it enters the North American session. Traders are positioning themselves ahead of China's highly anticipated PMI data release this evening. The NBS Manufacturing PMI is expected to reach 49.4 in August, marking the fourth consecutive month of improvement but still indicating contraction. Conversely, the Services PMI is projected to be 51.1, showing a slight decline from July's 51.5 and marking the sixth consecutive monthly decrease in the index.

In addition to this, today China has engaged two of its largest financial firms to assess the state of the embattled shadow lender Zhongrong International Trust Co., possibly paving the way for a potential bailout.