Currency markets put in a tame performance at the start of the trading week. The US Dollar edged gently higher in a move that seemed corrective following Friday’s equally mind decline. The greenback has occupied a narrow range against an average of its major counterparts for the better part of a week, with directional progress likely to be muted as traders look ahead a speech from Fed Chair Yellen on Friday.
The Yen moved fractionally higher as most stock exchanges struggled, boosting the appeal of the perennially anti-risk unit. The MSCI Asia Pacific regional benchmark equity index shed 0.2 percent. Shares in Australia and Japan lost ground but China shrugged off negativity, with the mixed picture keeping the Japanese currency’s gains relatively modest.
Looking ahead, a lackluster offering of European and US economic data may keep sentiment trends at the forefront. Futures tracking the FTSE 100 and the S&P 500 are pointing decidedly lower ahead of the opening bells in London and New York, hinting at a broadly risk-off mood. If this continues, the Yen may continue to build broadly higher.
US political volatility may change the landscape however. Markets have been highly sensitive to headlines emerging from Washington DC as an embattled White House looks increasingly unlikely to deliver on the pro-growth agenda promised on the campaign trail. A stray headline that seems to alter this calculus one way or another might stoke seesaw price swings across the asset spectrum.
** All times listed in GMT. See the full DailyFX economic calendar here.