USD – Continues to gain support, with the Dollar Index strengthening on the back of a hawkish Federal Reserve outlook as markets await today’s US PMI data for further direction.

EUR – Remains under pressure against the dollar, with EUR/USD falling to its lowest level since late July as improving geopolitical sentiment and broad USD strength weigh on the single currency.

GBP – Trades near the 1.3300 level against the dollar, with sterling facing pressure from a larger-than-expected UK fiscal deficit and ongoing dollar demand.

USD: The US dollar remains firmly bid, supported by a hawkish Federal Reserve policy stance and resilient market expectations for US interest rates. The Dollar Index has extended its recent recovery as investors continue to favour the greenback ahead of today’s closely watched US PMI releases. Stronger economic data could reinforce the view that the Fed can maintain a restrictive policy stance for longer, providing further support for the dollar. While markets remain sensitive to incoming economic data, the current bias remains constructive for the greenback as traders look for confirmation that US economic activity continues to outperform other major economies.

EUR: The euro remains on the defensive, with EUR/USD declining to fresh lows not seen since late July. According to Commerzbank, reduced geopolitical tensions have diminished safe-haven flows into Europe, while broader dollar strength has further weighed on the single currency. The pair has struggled to find support as investors increasingly favour the US dollar amid diverging monetary policy expectations. Unless upcoming Eurozone data provides a positive surprise, near-term risks remain tilted to the downside, with traders closely monitoring US PMI data as the next key catalyst for EUR/USD direction.

GBP: Sterling has weakened towards the 1.3300 area against the US dollar, with both fundamental and technical factors contributing to the softer tone. Recent UK public finance figures revealed a fiscal deficit that exceeded market expectations, raising concerns about the government’s borrowing outlook and placing modest pressure on the pound. UOB analysts note that GBP/USD is currently testing support around the 1.3300 level, with a sustained break below potentially opening the door for further losses. However, broader direction is likely to remain dictated by US dollar sentiment and today’s economic data releases, rather than domestic UK developments alone.