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While we await US CPI data as a key event this week, analysts at Scotiabank noted the key themes across the FX space.

Key Quotes:

“The GBP’s slide on domestic political concerns yesterday provided a bit of a lifeline for the broadly softer USD.”

“The big dollar reversed broadly and is trading higher again versus its G-10 peers this morning. Movement is fairly limited, however, and broadly positive risk sentiment””equities are mainly higher and major bond markets are modestly softer””amid calming (for now, at least) trade fears are weighing on the JPY (under-performing broadly again).”

“The GBP, for its part, is more or less stable versus the USD and therefore a modest out-performer despite mixed data reports from the UK earlier.”

“The CNY eased modestly, reflecting softness in the Asian FX space generally, while the MXN is trading flat on the day after the USD rebounded from the 200-day MA (19.05).”

“We remain a bit more circumspect on the broader outlook for the USD from here, with good news largely priced in and firmer economic data emerging from Europe generally bolstering expectations that other central banks will be adjusting policy in the coming months.”