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A summary of news and snapshot of moves ahead of the US session.

The US dollar was stable against the Canadian dollar today, after the USD/CAD’ slump last week. But in light of the Fed turning dovish, we now think that there is a greater risk for the USD/CAD to reverse its bullish trend. As such, any short-term strength could fade – especially if incoming US data deteriorates further, starting with CPI tomorrow.

The EUR/USD surged higher yesterday as the dollar sold off, which gathered pace after the Fed’s Bullard said a rate cut might be warranted. However, the euro’s rally has come to a halt, at least for now, following the publication of weaker-than-expected Eurozone consumer inflation data this morning.

The Aussie found itself under pressure ahead of today’s wage data, thanks to soft consumer growth and Trump’s latest trade-twist. Just 27-pips above 69c, it may take more than stronger employment tomorrow for this level to hold.

The latest US inflation numbers were again slightly below expectations, causing the Dollar Index to further extend its losses, with the Canadian dollar leading the gains thanks to a much stronger jobs report from the North American nation.

Australia’s Inflation appears to have left the building for today’s CPI report. With headline data points missing expectations and moving further away from the target band, rate cut-calls are likely on the rise.

Whilst Australian employment held up, it doesn’t let inflation off the hook as a weak print tomorrow could see rate cut calls resurface.

The British pound was the weakest major currency yesterday on the back of reports that there was no agreement on a customs union between Labour and Conservatives. It fell further this morning in reaction to the latest consumer inflation data.

The major FX pairs further extended their losses earlier this morning, before rebounding to turn green on the day as North American participants slowly made their way to their trading stations.

After a turbulent session on Wall Street in the previous session, Asian markets and European bourses rose on Friday. US futures are also pointing to a stronger start to trading on the opening bell and a rally into the year end after a particularly volatile couple of months.

As far as the US CPI is concerned, this will be the last piece of major news before the Federal Reserve’s rate decision next week. So, unless it shows a surprisingly strong or surprisingly weak reading, it is unlikely to have any meaningful impact on the decision of the FOMC when it comes to monetary policy.

It’s a day of dispersion in the global FX market, with European currencies rising against the greenback and commodity dollars losing ground versus the world’s reserve currency.