On September 4, Federal Reserve Governor Christopher Waller stated that the Fed should begin cutting interest rates this month and continue with multiple rate cuts over the coming months, adding that officials can debate the specific pace of rate reductions. Speaking to CNBC on Wednesday, Waller said: "We need to start cutting rates at the next meeting, but we don't have to follow a rigid sequence of steps." He further explained: "We can observe how things develop, as people are still concerned about tariff-induced inflation. I'm not worried about it, but others are concerned." He indicated that once the impact of tariffs begins to fade, inflation could move "closer to" the Fed's target within six to seven months. Under these circumstances, the Fed should act preemptively to address sharp slowdowns in the job market, because "typically when the labor market deteriorates, it deteriorates quickly," Waller said. He also added that he believes the Fed's benchmark rate is currently above the neutral rate, meaning monetary policy is constraining the economy. "We know we want to move toward the neutral rate," he said. "We roughly know how much we may need to cut rates, for example, 100 or 150 basis points. But how quickly we achieve this goal will depend on subsequent data."

Additionally, according to final data released by S&P Global on Wednesday, Germany's August services PMI was revised down to 49.3, falling below both the 50 boom-bust threshold and the initial reading of 50.1, as well as July's previous reading of 50.6. The services sector, which serves as a pillar of Germany's economy, showed weaker resilience than previously expected, representing a new setback for Germany, which has been mired in economic difficulties for years. In contrast, the eurozone's overall composite PMI rose slightly to 51.0 in August, revised down 0.1 percentage point from the initial reading, reaching a 12-month high but still representing only modest growth. Growth momentum mainly came from improvements in some member countries and manufacturing, but the slowdown in services and weakness in Germany, the largest economy, highlighted the uneven nature of economic recovery. Intensifying price pressures represent another signal that cannot be ignored. Data shows that input costs and output prices faced by eurozone companies are accelerating upward, which may complicate the European Central Bank's inflation outlook. Although markets generally expect interest rates to remain stable, rising inflation will undoubtedly test policymakers' resolve.

Key data to watch today includes: Eurozone July retail sales monthly rate, US August ADP employment change, US July trade balance, US initial jobless claims for the week ending August 30, Canada July trade balance, and US August ISM non-manufacturing PMI.

**Dollar Index** The Dollar Index declined with volatility yesterday, closing slightly lower on the daily chart, with current prices trading around 98.20. In addition to profit-taking exerting downward pressure on the currency, dovish comments from Fed officials that heightened Fed rate cut expectations also served as an important factor pressuring the currency lower. Furthermore, concerns about Fed independence also weighed on the currency to some extent. Today, watch for resistance around 98.70, with support below around 97.70.

**EUR/USD** The Euro rose with volatility yesterday, closing slightly higher on the daily chart, with current prices trading around 1.1660. Besides short covering and technical buying formed around the 1.1600 level providing some support for the currency, the Dollar Index's weakness under negative factors such as dovish Fed comments heightening rate cut expectations also provided some support for the Euro. Additionally, good PPI data from the eurozone during the period also provided some support for the currency. Today, watch for resistance around 1.1750, with support below around 1.1550.

**GBP/USD** The Pound rose with volatility yesterday, closing slightly higher on the daily chart, with current prices trading around 1.3440. Besides short covering providing some support for the currency, the Dollar Index's weakness under negative factors such as dovish Fed comments heightening rate cut expectations also provided some support for the Pound. Additionally, good UK economic data released during the period also provided some support for the currency. Today, watch for resistance around 1.3550, with support below around 1.3350.