USD is trading steady on the day - Scotiabank

The US Dollar (USD) is little changed in quiet trade. Overnight price action saw the Euro (EUR) advance in response to the anticipated win for the center-right in Germany's federal election but the result was largely as expected, Scotiabank's Chief FX Strategist Shaun Osborne notes.

USD steady in quiet trade

"The JPY retains a firm tone, pushing the USD below the 150 line, while the GBP remains relatively firm in the low 1.26s. US equity futures are trading in the green, reversing Friday's hefty losses, but US markets have underperformed in recent weeks as investors await clarity in US tariff policy, allowing foreign markets--especially European--to forge ahead which may undermine demand for the USD to some extent."

"It's a relatively quiet start to the week in terms of data reports and most attention will likely fall on Friday's Personal Income and Spending plus the associated PCE deflator for January. The core PCE is expected to rise 0.3% in the month and 2.6% in the year, down slightly from December's 2.8%."

"Slow progress on restoring price stability will underscore the Fed's 'on hold' messaging. Better than expected data won't change that outlook much. Higher than expected core PCE data might prompt markets to think a bit harder about how long the Fed pause will last, however."