In today's early trading session, the US Dollar has shown signs of weakness against major currencies, as market focus shifts away from European political uncertainties to upcoming elections in France. This shift has diminished safe-haven demand for the Greenback. Meanwhile, the Japanese Yen continues to depreciate against the Dollar, nearing the critical 160.00 level, prompting memories of past Ministry of Finance interventions.

The near-term outlook for the US Dollar has brightened following the release of the preliminary S&P Global PMI report for June, which surprisingly indicated accelerated growth in both manufacturing and service sectors. The Composite PMI surged to 51.7, outperforming market expectations of a decline to 51.0.

The US Dollar Index (DXY) continues to exhibit a slightly bullish trend within a well-defined ascending channel that has been in place since late 2023. The index is currently trading near 105.50, having recently bounced off the lower channel support around 104. The 50-day moving average has crossed above the 200-day moving average, signaling potential continued upward momentum. The RSI is hovering near the 60 level, indicating that there is still room for the index to rise before reaching overbought conditions. As long as the index remains above the 104 support level, the bias remains slightly bullish, with the next resistance levels to watch at 106.50 and 107.05:

Economic data releases today include the Chicago Fed Activity Index for May and the Dallas Fed Manufacturing Business Index for June. In addition, the US Treasury is set to auction new debt, while remarks from US Federal Reserve Bank of San Francisco President Mary Daly are anticipated to provide further insights into monetary policy.

Market sentiment surrounding US interest rate derivatives indicates a 59.5% probability of a 25 basis point rate cut in September, with a 34.1% likelihood of a pause, and a mere 6.4% chance of a more aggressive 50 basis point cut.

Meanwhile, the British Pound has rebounded against the US Dollar, trading around 1.2650 in early New York trading, recovering from last week's sharp decline. Despite expectations of a rate cut by the Bank of England in August, the Pound has shown strength against major peers, excluding the Euro. Speculation around the BoE's monetary policy has been fueled by recent comments suggesting a dovish stance on interest rates.

Governor Andrew Bailey highlighted the return of headline inflation to the BoE's 2% target, indicating overall positive economic developments. However, concerns remain about persistent service sector inflation risks, with recent data showing a slower deceleration to 5.7% in May, compared to expectations of 5.5%.

Investor sentiment towards the UK economy has been tempered by the unexpected slowdown in service sector activity, as indicated by the preliminary S&P Global/CIPS PMI report for June. This unexpected deceleration has raised uncertainties about the economic trajectory despite inflationary pressures stabilizing.

The GBP/USD pair is exhibiting a slightly bearish outlook as it continues to consolidate within a descending triangle pattern. The pair have recently tested the lower boundary of this formation, around the 1.2600 level, after failing to break above the resistance near 1.2900. The moving averages are in a bearish alignment with the 50-day moving average below the 200-day moving average, indicating downward momentum. The RSI is trending below the 50 level, suggesting further selling pressure. A break below the 1.2600 support could open the door to further declines towards 1.2400: