The USD is trading lower against the majority of its major currency peers so far today but the DXY is registering a small gain on the session, reflecting the underperforming EUR, which has slipped 0.2% to give the index a modest boost, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

DXY gains on EUR weakness

“Weaker stocks and perhaps month-end flows helped the USD bid tone yesterday but the overall USD tone remains soft and minor gains so far this week in the DXY are barely challenging the downtrend that has developed over the past few weeks. Stocks look in better shape today, however, and there is not much talk or evidence of month-end USD demand. The USD is likely to retain a soft undertone while markets continue to price in the risk of aggressive Fed rate cuts over the balance of the year.”