USD – Remains solid, extending its recent gains, supported by last week’s strong data and a broadly steady tone, though confirmation from upcoming Fed minutes will be key for further upside.

EUR – Holding relatively steady but facing mild political uncertainty following reports around ECB leadership, with limited data catalysts in the immediate term.

GBP – Showing resilience after recent weakness, supported by slightly firmer inflation data, though momentum remains fragile ahead of retail sales and PMI releases.

USD:

The dollar’s positive run has continued, building on last week’s solid data. Despite the absence of major releases yesterday, the greenback extended gains, with some market participants viewing the move as a catch-up to the stronger economic figures seen previously. The U.S. Dollar Index remains on a steady upward path this morning.

Attention now turns to durable goods and industrial production data later today, followed by the January minutes from the Federal Reserve. At that meeting, aside from two dissenters, policymakers broadly favoured holding rates steady. Confirmation of that stance in the minutes could reinforce the dollar’s recent strength, particularly if the tone leans toward patience rather than signalling imminent easing.

EUR:

The euro is trading without strong direction today, though headlines have introduced a degree of political uncertainty. The Financial Times reported that Christine Lagarde may be considering leaving the European Central Bank before the end of her term in 2027. While the ECB has stated no decision has been made, such speculation could eventually prompt debate over her successor and the future policy direction of the institution.

With no major Eurozone data today, focus will shift toward Friday’s PMI releases. In the absence of clear catalysts, EUR may trade in relatively contained ranges, with broader USD dynamics likely to remain the primary driver.

GBP:

Sterling avoided a sharper sell-off yesterday thanks to a late recovery, after initially sliding on soft UK labour market data. The pair had been heading for a near 1% decline before clawing back roughly half of those losses.

This morning’s inflation release offered modest support. Headline CPI fell from 3.4% to 3.0%, in line with expectations, while core CPI printed slightly above consensus at 3.1%. While not strong enough to dramatically shift expectations, the data was firm enough to prevent additional downside pressure.

Next for sterling will be retail sales and PMI data on Friday, which could prove pivotal in shaping near-term expectations around the policy path of the Bank of England. Until then, GBP may remain reactive to both domestic data and broader dollar sentiment.