The USD is mixed to weaker overall on the session amid a broader slump in market sentiment. Bonds remain under pressure globally, with European markets remaining weak, while global equities are mostly lower; Asian markets were broadly positive but European bourses are softer as the local bond sell-off extends while US equity futures are down a little more significantly on growth worries and concerns that the AI/tech boom is deflating, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

USD mixed on the day

"The JPY and CHF are relative outperformers on the session, with the NOK and SEK also firmer. The EUR extended gains to a little over 1.08 ahead of today’s ECB policy decision before consolidating. USD sentiment looks increasingly fragile as investors perceive a weakening in the 'US exceptionalism' argument that has been a key pillar for the USD’s strength in recent years." 

"Yield differentials are less supportive in the short run and contrasting growth prospects, driven by DOGE efforts and trade war concerns in the US versus a significant expansion of fiscal firepower in Europe, are a longer-term negative for an overvalued USD. Yesterday’s US data round was mixed. The Fed’s Beige Book noted slightly firmer activity and employment through mid-January, with wages and prices up moderately." 

"ISM Services data was firmer than expected but there might have been a heads-up warning for Friday’s jobs data from the weaker than expected ADP report. Despite weak tracking with NFP, private sector hiring was well below forecasts in February and a soft payrolls report will certainly add to softer growth concerns. The US reports trade data for January at 8.30ET; preliminary data reflected a significant widening in the deficit as importers tried to get ahead of tariffs."