Market participants may be taking a wait-and-see approach to the U.S. dollar's movements at the start of the week

Market participants may be taking a wait-and-see approach to the U.S. dollar's movements at the start of the week

16.01.2023

Last weekend, the U.S. dollar strengthened against the Canadian dollar, with USD/CAD rebounding by approximately 120 pips from 1.3320 to 1.3438.The USD/CAD pair had been in a downtrend on the 4-hour chart since January 3, but last weekend’s rebound pushed it above the 20-period moving average. However, as the US dollar has once again become the weakest currency during today’s Asian session, we should remain cautious about the downside potential for USD/CAD.

Among European currencies, the euro saw mixed trading against the U.S. dollar, with the EUR/USD pair trading in a range between 1.0779 and 1.0867. However, in Asian trading at the start of the week, the euro has been gaining ground against the U.S. dollar, hitting a new high for the year. The EUR/USD pair is currently trading around 1.0868, and given its strong upward momentum, we will be closely monitoring the euro’s price movements as we move into European trading hours.

Today, Japan’s machine tool orders are scheduled for 3:00 PM during Asian trading hours, Norway’s trade balance for 4:00 PM during European trading hours,at 4:45 PM the French budget balance, at 8:00 PM the total reserves of the Eurozone, at 10:00 PM the Philippine Consumer Price Index, at 10:30 PM (U.S. time) Canadian manufacturing shipments, at 11:00 PM Canadian existing home sales, and at midnight a statement by Bank of England Governor Bailey.With a series of remarks from key U.S. officials scheduled for this week, we will first carefully monitor the movement of the U.S. dollar at the start of the week.