The market liquidity early on a Monday is often low until more Asian markets begin trading, leading to potential price fluctuations. As the new foreign exchange week begins, there is minimal change from late Friday, though the USD and JPY show slight strength.

Despite continued conflict in the Middle East over the weekend, currency rates have not shifted dramatically from late Friday. Current rates include EUR/USD at 1.1532, USD/JPY at 143.90, and GBP/USD at 1.3559.

Exchange Rates Overview

Other rates are USD/CHF at 0.8116, USD/CAD at 1.3591, AUD/USD at 0.6483, and NZD/USD at 0.6010. Prices can change as the day progresses and more markets open.

To put it plainly, liquidity tends to be thinner at the start of the trading week, particularly during early Monday hours. This lower participation creates gaps or sometimes sudden moves, not necessarily driven by fresh news, but simply because fewer traders are pricing assets. What we’re seeing now in the general calm of the FX market—despite turbulence elsewhere—can mostly be chalked up to this lack of depth.

The figures indicate mild strength in both the dollar and the yen, though nothing that screams directional conviction. Essentially, we’re looking at steadiness rather than momentum—but that doesn’t mean it’ll last. We already know these early Asia hours are rarely loud, so the fact that levels haven’t moved much yet offers little information about how New York or London desks may come in. The weekend headlines didn’t appear devastating enough to cause a drastic break in currency values by Monday morning, but they’ll still be poured over by participants as volumes build.

As for individual pairs, a few things stand out. The loonie remains soft against the dollar, and the Aussie continues to hover just below 0.65. The kiwi also struggles to hold above 0.60. There’s a general tone of risk-aversion embedded in those weaker commodity currencies, though it hasn’t spilled over into panic. It’s less about sudden shocks and more about hesitancy; no eager buying, no violent selling—just holding patterns for now.

Market Sentiment and Volatility

For those of us pricing volatility or managing short-dated gamma, what matters most in the coming sessions is gauging whether this muted start extends beyond Asia through into Europe or whether we see a build in directional bets. The yen’s mild strength may reflect some positioning ahead of any unexpected developments in global headlines, particularly from areas tied to energy or geopolitical sensitivities.

Rates like USD/CHF trading sub-0.82 are still within broadly familiar territory, and the euro-dollar hasn’t broken convincingly above 1.1550 either. Pound-dollar strength is limited, and without stronger moves in rate differentials or macroeconomic surprises, upward progress may stall. For now, too, there’s no sharp repricing of macro risks through currency markets, which suggests expectations haven’t shifted much since Friday. However, that doesn’t imply traders are complacent; it just means triggers for larger-scale reactions are still being waited on.

Watch for the pickup in realised volatility. If we start getting larger hourly ranges as European markets open, it would suggest a willingness to push some of these pairs out of their current ranges. We’ll adjust accordingly, of course. Thin Monday mornings don’t often come with conviction, but they do set the tone—especially in terms of where optionality is parked and whether stops are lingering too close to current market prices. Let’s keep sessions under observation and reassess after the London open.

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