Today's spotlight is on the US Consumer Price Index (CPI). As the North American session kicks off, the dollar shows mixed performance. The Reserve Bank of New Zealand's rate cut, though not entirely unexpected, has led to a 1% drop in the Kiwi dollar. Meanwhile, a softer-than-anticipated UK CPI report threatens to halt sterling's five-day rally. The euro has reached a new high since early January, trading near $1.1030.
Equities are predominantly higher today, while gold remains steady around $2478, just shy of last month's record high of $2483. September WTI crude oil is trading at the lower end of yesterday's range but remains above $78.

Asia-Pacific Markets
In an otherwise quiet session, the Reserve Bank of New Zealand has joined other G10 central banks in commencing its easing cycle. Japan's Q2 GDP report is highly anticipated, with expectations of a recovery following the 0.7% quarter-over-quarter contraction in Q1, driven by rebounds in consumption and business investment. The softer US Producer Price Index (PPI) from yesterday helped lower US yields, which in turn weighed on the dollar against the yen. The Australian dollar also hit a marginal new high, slightly above $0.6640.

European Markets
The UK's July CPI report came in softer than expected, putting pressure on sterling. Although the headline CPI fell by 0.2%, the year-over-year rate rose to 2.2% from 2.0%, due to a 0.4% drop in July 2023. The euro had a strong day yesterday, initially dipping on a weak German ZEW survey but subsequently recovering to $1.10, closing just below $1.0995, marking its second-best close of the year. Today, the euro has extended its gains to about $1.1030, while sterling found initial support near $1.2820.

American Markets
All eyes are on the US July CPI today. Yesterday's PPI report showed a slightly softer-than-expected 0.1% gain in the headline figure (2.2% year-over-year, down from a revised 2.7% in June) and a flat core reading (2.4% year-over-year, down from 3.0% in June). The broad decline in the US dollar, coupled with a risk-on sentiment, helped lift the Canadian dollar after its six-day losing streak ended with a minor loss on Monday. The greenback recorded its lowest settlement since July 18. Similar to yesterday, the US dollar approached but did not breach CAD1.3700 today.