USD – Has found some support, with the Dollar Index recovering towards 99.00 as markets position ahead of US Core PCE inflation data and remarks from Kevin Warsh later this week.

EUR – Retains an upward bias against the dollar, with analysts continuing to target the 1.1725 area, although overbought signals suggest gains may become more gradual in the near term.

GBP – Remains close to recent highs despite easing slightly overnight, with sterling holding firm as investors await the next round of US economic data.

USD:

The dollar has stabilised after recent weakness, with the Dollar Index recovering towards the 99.00 level as traders await this week’s key US Core PCE inflation release. Markets are also focused on comments expected from Kevin Warsh, which could provide further insight into the outlook for US monetary policy. While the greenback has found some near-term support, investors remain cautious given recent signs of softer economic momentum. The upcoming inflation data is likely to be the main catalyst for FX markets, particularly if it influences expectations around future Federal Reserve policy.

EUR:

The euro remains well supported against the dollar, with UOB analysts maintaining an upside bias towards the 1.1725 area. EURUSD has eased slightly from recent highs, however, as technical indicators point to increasingly overbought conditions following the strong rally seen in recent sessions. Despite the pullback, broader sentiment towards the single currency remains constructive, largely reflecting persistent caution towards the dollar rather than a major shift in the Eurozone outlook. Attention now turns to US data, which will likely determine whether EURUSD can resume its upward trend.

GBP:

Sterling edged lower overnight but continues to trade close to multi-month highs against the dollar. The pound has been supported by broader USD weakness in recent weeks, although gains have moderated as markets adopt a more cautious stance ahead of the US inflation release. Against the euro, sterling remains relatively resilient, underpinned by expectations that UK rates may stay elevated for longer than in parts of the Eurozone. For now, GBPUSD is likely to remain driven by developments in the US rather than domestic UK factors.