USD

The US dollar had a mixed round as there were no reports out on Monday and traders are pricing in expectations for the FOMC decision later this week.

A 0.25% interest rate hike is widely expected and even more hawkish hints could lift the US currency. There are no reports due from the US economy today.

EUR

The euro got a strong boost when ECB sources reported that policymakers are starting to discuss the path of interest rate hikes. They reported that officials are comfortable with the idea of mid-2019 hike expectations and that they should think about the timing of their future tightening moves from there. Data from the euro zone actually came in weaker than expected but traders shrugged this off. ZEW economic sentiment figures from Germany and the entire region are due today.

GBP

The pound staged a strong rally on rumors of a Brexit deal and made another leg higher on confirmation. The EU and UK have reached an agreement on the post-Brexit transition period but also mentioned that issues surrounding the Irish border still need to be ironed out. The focus shifts back to fundamentals with UK CPI on tap and a dip from 3.0% to 2.8% for the headline figure eyed. The core figure could fall from 2.7% to 2.5%.

CHF

The franc had a mixed run as it caved to the European currencies then chalked up smaller losses to the rest. There were no reports out of the Swiss economy then while today has the trade balance and SECO economic forecasts. Positive readings could still keep the franc supported by risk appetite might wind up dampening its gains.

JPY

The yen gave up ground as risk appetite improved for the most part of the day. Japan printed weaker than expected trade balance over the weekend and the concerns surrounding PM Abe’s political scandal appear to be fading. There are no reports due from Japan today so sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls chalked up some gains, except against their European peers. New Zealand’s Westpac consumer sentiment index improved from 107.4 to 111.2 while Australia reported a larger 1.0% gain in HPI for Q4. The RBA minutes revealed that the central bank is in no rush to hike. Canadian wholesale sales and the GDT auction are lined up next.

By Kate Curtis from Trader’s Way