The US Dollar has surged, catching many off guard with a potent one-two punch. The initial catalyst came from Federal Reserve member Michelle Bowman, whose hawkish remarks underscored that a rate cut is not on the horizon due to persistent inflation risks. This stance fortified the USD's position, reinforcing the market's perception of a steadfast Federal Reserve:

Not long after, Canadian inflation data added fuel to the fire. The CPI for Canada came in hotter than anticipated, rising from 2.7% to 2.9%, while the market had expected a modest 2.6%. This inflationary spike across the border further supported the USD, as it highlighted the broader inflationary pressures within the North American region.

Additionally, the US House Price Index exhibited a positive uptick, moving from 0.0% to a 0.2% increase, further bolstering the USD's ascent.

Across the Atlantic, risk-off flows have emerged from Europe, contributing to the Greenback's near-term rise. The European markets are grappling with the potential outcomes of the imminent French snap elections, injecting a layer of uncertainty that traders are struggling to price appropriately. This political turbulence has driven investors towards the relative safety of the USD.

As we look ahead, the focus now shifts to the Consumer Confidence data, especially after last week's lackluster Retail Sales report which painted a picture of a sluggish US consumer. The forthcoming insights from two Federal Reserve members will be closely scrutinized for any hints on the future trajectory of monetary policy. Additionally, the first presidential debate between current President Joe Biden and former President Donald Trump could provide further volatility as markets react to any significant political developments.

Interest rate futures are currently pricing in a 61% probability of a 25 basis point cut in September, with a roughly 32% chance of a pause. The US 10-year benchmark rate remains steady at 4.25%, providing a stable backdrop amid these fluctuating expectations.

In Europe, the spread between the French and German 10-year benchmarks has eased slightly from 0.79% to 0.74%, yet it remains at levels not seen in over six years, indicating ongoing market concerns about regional stability. 

Meanwhile, the British Pound has shown relative strength against most currencies, with the notable exceptions being the Japanese Yen and the Australian Dollar. The GBP's buoyancy can be attributed to the uncertainty surrounding the Bank of England's (BoE) monetary policy stance. Market speculation suggests that the BoE may cut interest rates in August, marking the first such move since the Covid-19 pandemic's onset. Governor Andrew Bailey's recent comments about the "finely balanced" decision to maintain rates at 5.25% have further fueled this speculation. 

The GBP/USD 4-hour chart exhibits stalling upside momentum following a bullish pullback. After rebounding off the ascending trendline support, the pair encountered resistance near the 1.2750 level, which has led to a temporary consolidation phase. The RSI hovers around the midline, suggesting a balance between bullish and bearish forces. Key support is situated at the 1.2600 level, while resistance is clearly defined at the 1.2750 level. A breach below the support will likely trigger a deeper correction: