### United States
The US dollar is facing a subdued start to the new week amidst the backdrop of five G10 central bank meetings and significant economic data that may attest to the robustness of the US economy despite some pessimistic forecasts from the Atlanta Fed. This particular forecast, projecting a -2.4% growth, has been a cause of apprehension among market participants, though it could be reassessed with the release of February’s retail sales today, anticipated to rise by approximately 0.7% after a 0.9% decline in January. The recent US Treasury Secretary’s comments dismissing the plunge in equities as a “healthy correction” have inadvertently spurred additional selling pressures. Moreover, US index futures have declined around 0.5%, reflecting some rollback on prior gains. Meanwhile, Asia Pacific equities showed gains, excluding China’s CSI 300, despite marginal increases in Shanghai and Shenzhen. The Dollar Index, now consolidated, had faltered below 103.25 earlier last week, encountering resistance above 104.00 in its last couple of sessions but remaining beneath this threshold presently.
### Eurozone
The euro has hovered quietly today within a range after setting session highs slightly above $1.0910 before the weekend. It had found support near $1.0865 with a high last week close to $1.0950. The discussion around an agreement potentially struck in Germany to facilitate the passage of a fiscal initiative is nudging the euro positively. This week, however, the Eurozone is relatively less in focus considering the upcoming central bank meetings and sparse economic news, though participants remain attentive to Germany’s fiscal negotiations and government formation.
### United Kingdom
Sterling demonstrated resilience last week despite an unexpected contraction in January’s GDP. After surpassing $1.29 last Tuesday, it has managed to maintain above this level. Ahead of the weekend, it edged closer to its recent highs near $1.960. Movements within the sterling’s recovery from a low near $1.21 in January suggest an average pullback spanning around two cents, indicating possible pressures toward last week’s low near $1.2860. The UK’s economic news is light this week until Thursday’s employment data and the Bank of England’s meeting. The central bank is unlikely to adjust policy during this meeting, with a cautious approach expected given the prevailing uncertainties.
### China
China demonstrated a notable shift after the PBOC set the dollar’s reference rate considerably lower, marking its lowest in four months. The dollar’s slide against both onshore and offshore yuan variants accentuated this development. The economic data from February exhibits a deceleration compared to last year’s pace, with slips in new house prices and stagnant existing house prices indicating that further economic interventions could be warranted to meet growth and inflation benchmarks. Additionally, Chinese officials unveiled a hinted strategy to stimulate consumption, births, and AI investment.
### Japan
The dollar reached five-month lows against the yen last Tuesday around JPY146.55, later nudging higher by the weekend. Recent activity saw the dollar moving close to JPY148.65 today in Europe, after a brief probe above JPY149, primarily driven by the rise in US rates and a decrease in Japanese rates. Upcoming Japanese tertiary industry data and February trade figures are sessional points of interest this week, particularly ahead of the BOJ meeting concluding on Wednesday.
### Canada
In Canada, policy ambiguity, largely influenced by ongoing US tariff threats, continues to cast uncertainty over market sentiment. The Canadian dollar’s recent activity remained mostly within a previously noted range, signaling a form of equilibrium unless notable breaks occur. As Canada gears up for its February CPI report, political narratives, especially surrounding the US-instigated trade dynamics and potential early elections, also weave into the broader market narrative.
### Australia
The Australian dollar concluded last week on a strong note, closing above its week’s range high near $0.6350. Although intraday indicators display stretched momentum, developments in Australia remain fairly muted ahead of Thursday’s employment report. The outlook for rate changes in response to this report appears minimal, with expectations anchored by upcoming central bank meetings.
### Mexico
In Mexico, the peso exhibited strength in the face of US tariff threats and despite drops in industrial production. The peso recently advanced to levels unseen since shortly after last November’s US election, trading in a tight range today. With a forthcoming CPI report next Monday, Mexico’s central bank appears poised for a significant rate cut later this month, amidst a geopolitical backdrop colored by US-Mexico tariff tensions.
