Markets opened the week with a weaker U.S. dollar, lighter volumes, and increased global uncertainty driven by ongoing trade policy tensions.

Market Snapshot

• USD/CAD: Down 0.1%
• EUR/USD: Up 0.4%
• GBP/USD: Up 0.4%

The U.S. dollar declined against most G10 currencies in early trading amid renewed uncertainty around U.S. trade policy. Spot volumes are lighter than usual with Tokyo and London markets closed for holidays.

Key Themes Driving Markets

Light Trading Conditions

• Holiday closures in the U.K. and Japan have led to muted volumes and thinner market liquidity to start the week.
• Despite this, the dollar has weakened broadly, continuing last week’s trend tied to policy-driven risk aversion.

Euro Strength and Portfolio Rotation

• The euro continues to gain traction as an alternative to the U.S. dollar in global portfolios.
• Investor concerns around the sustainability of U.S. policy direction, particularly on tariffs and trade, are prompting a diversification into euro-denominated assets.

Earnings Watch

This week features a broad slate of key earnings, including:

• Ford: Closely watched for any commentary on the impact of tariffs and trade friction on supply chains and pricing.
• Coinbase (Thursday): Will provide insight into the crypto sector amid volatile capital markets.
• Enbridge: A major Canadian name reporting this week, with possible comments on cross-border trade and energy policy.

Economic Calendar Highlights

Wednesday – FOMC Decision:

• No change expected, but all eyes will be on the tone of the post-meeting statement.
• Pressure from the Trump administration for rate cuts remains a lingering influence on market sentiment.

Thursday – U.S. Jobless Claims & Bank of England Decision:

• Coming one day after the Fed decision, this release may shape short-term expectations for monetary policy shifts.
• Policy watchers are looking for any indication of how the BoE will navigate recent inflation data and currency pressures.

The week opens quietly on low volume, but markets are bracing for a wave of data and earnings that could reignite volatility. The U.S. dollar remains under pressure, and investor focus is shifting to central bank commentary and the earnings impact of trade friction.