USD weakens ahead of rate announcement on Wednesday

Key Movers

In the Eurozone, the USD dropped 0.3% against the EUR despite the soft German Consumer Price Index (CPI) data. German preliminary inflation rates year-over-year came in at 3.8%, slightly below the forecasted 4% and the previous 4.5%. German preliminary gross domestic product (GDP) reports year-over-year were released at -0.3% which was better than the expected -0.7% dip. Additionally, Spanish flash yearly CPI data stayed steady at 3.5%, coming in below forecasts of 3.8%. The euro area final consumer confidence reported was at -17.9, the same as forecasts.

In UK news, net borrowing of mortgage debt by individuals decreased from £1.1 billion in August to £-0.9 billion in September. The GBP has been trading fairly flat ahead of the Bank of England (BoE) rate announcement on Thursday.

Bank of Canada (BoC) Governor Tiff Macklem is scheduled to speak this afternoon. Last week Macklem indicated that interest rates may have peaked but the BoC would like to see inflation heading towards the 2% target before making any rate cuts. Markets eagerly await the release of the Canadian gross domestic product (GDP) data set to be released as an economic health indicator. Oil prices have eased 1% despite continued conflict in the Middle East.