FX Today: Markets thin as the new year rolls around


In forex today, markets have ground to a near-halt heading into the New Year's shutdown to round out the holidays, and although the latter half of this week could see an influx of fresh volumes into the broader markets, the fx marketspace remains tepid as investors take a step back and reassess their bets heading into 2019.

Major pairs remain firmly planted within recent ranges as Monday's action sees G10 currencies hobbled on paper-thin volumes; the EUR/USD pairing remains trapped near the high end of last week's range near 1.1450 and threatening to head lower to kick off 2019, while the Sterling-Dollar pairing continues to splash around just south of 1.2700, a key technical level that has seen the Cable restrained since Brexit proceedings seized up in early December. The USD/CAD pair continues to tick thinly into near-term highs near 1.2650 as slumping oil prices continue to pull the rug out from underneath the Candian Loonie, but anemic holiday markets are preventing any major market moves from unfolding.

In the Pacific-Asia sector, the Aussie is seeing some early-week pre-holiday bidding on reassurances that trade talks between the US and China are, in fact, progressing, but details remain thin and evidence of forward momentum remains trapped behind vague headlines and frequent trade-centric tweets from US President Donald Trump. The USD/JPY remains trapped near 110.50 as the Greenback holds near last week's low points, and a fresh round of capital to come later in the week could see a rebound for the pair, depending on how investors plan to grapple with US Federal Reserve chairman Jerome Powell's off-the-cuff approach to handling FOMC statements through 2019.

Key headlines from the Asian session: 

UK MPs set to delay Brexit if May's Brexit deal fails - UK's Telegraph

Goldman Sachs makes another cut to 2019 Fed rate hike forecast

China sees first manufacturing decline in 2.5 years - Reuters

Trump tweets from the weekend on China and trade

Fed head Powell set to give markets a rough ride in 2019 - Reuters

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