Market liquidity is low on Monday mornings until more Asian markets open, which can lead to price fluctuations. Caution is advised during this period.
As of late Friday, some indicative exchange rates are as follows: EUR/USD at 1.1294, USD/JPY at 144.08, GBP/USD at 1.3066, USD/CHF at 0.8216, USD/CAD at 1.3867, AUD/USD at 0.6312, and NZD/USD at 0.5823.
Further updates will be provided regarding the weekend news.
Early Monday Market Dynamics
The initial note highlights that early Monday trading is often marked by thinner volume due to fewer active participants before Asia begins to fully engage. This thinning can make prices move more abruptly than during peak periods. It makes sense—when there are fewer orders in the book, even small trades can move the market far more than normal. As such, activity in this window should be approached with extra care, particularly in FX derivatives. We’ve all seen how a single outlier order can move a thin market considerably before liquidity returns to normal levels.
At the close of last week, spot currency rates suggested relatively steady trends in the majors. For example, the Euro was holding its ground against the Dollar around the 1.1294 level, while Sterling firmed to 1.3066. The Yen, meanwhile, traded at a softer 144.08 per Dollar, reflecting sustained pressure on the Japanese side. We note a continued bias in USD strength versus the Franc and Loonie as well, with Dollar/Swiss at 0.8216 and Dollar/Canada at 1.3867. South Pacific pairs like the Aussie and the Kiwi remained under pressure, each trading well below historical median values.
What stands out right now is how modest pricing adjustments into the Friday close hint at caution from larger participants. There wasn’t a broad directional bet placed across the G10 board, which tells us there’s hesitance—perhaps traders were unwinding as we approached the weekend, nervous about potential weekend risk headlines. When traders step back from commitment ahead of known event risks or uncertain weekends, it can mean we’re heading into a low-conviction opening. That matters for option traders watching implied volatility settings and attempting to sell premium into Monday or early Tuesday.
Week Ahead Outlook
As for next steps, the early part of the week will likely centre on clarity from any weekend policy signals or geopolitical surprises. Given the quiet tone late Friday plus the seasonal summer norms, it wouldn’t be odd to see pricing drift during Asia before liquidity comes back from Europe. These are classic trap conditions—short bursts of price movement on light volume, hard to fade but without deep conviction.
We advise position holders to adjust accordingly—watching early price discovery across Tokyo and Singapore desks for signs of intent, but not chasing unless real momentum surfaces. There’s a habit of false starts during these thin windows, particularly around 2 a.m. to 4 a.m. GMT. It’s smarter to track order book depth and implied volatility changes across the strikes you’re watching, rather than reacting to every pip moved.
The broader mood still leans defensive in risk-adjusted positioning. Until we get better direction, perhaps through macro or rate cues midweek, we’ll be focused on range constructions rather than breakout scenarios. Meanwhile, skew shifts could offer more clarity on true directional willingness rather than over-reading spot pricing in early sessions. Keep your stops mechanical and entries conditional—there’s not enough steam in early Monday hours to be discretionary.
