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Dollar Dropping for a Third Session

FOREX

Overall FX volumes are still lagging, mirroring the quiet Monday trade seen across most development markets. Nonetheless, the USD index is extending its decline, with the DXY now lower for a third consecutive session. Last week's lows are still intact, with markets likely pre-positioning for tomorrow's FOMC meeting.

CNY is marginally the best performer today, with better-than-expected industrial production and retail sales data out overnight proving supportive. JPY is at the other end of the table, weakening further as equities trade well across European and the US.

UK jobs data fared slightly better than expected, with 12k jobs lost on a 3m/3m basis in July vs. Exp. loss of 118k. GBP has been favoured again this morning, but GBP/USD is yet to top yesterday's highs of $1.2919, which remain the first target. News that the UK government had succeeded in getting their Internal Markets Bill past the second stage in the Commons had little market impact, with focus remaining on the amendments (known as Committee Stage) due next Tuesday.

US import/export price indices as well as August industrial production are the data highlights Tuesday. There are no central bank speakers of note.

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