The US Dollar benefits little from dull trading.
The US dollar began the week where it left off the previous one, easing across the board. Market participants were still upbeat about easing US price pressures and the possibility of a US Federal Reserve monetary policy pivot in the near future.
However, optimism faded at the start of a quiet week, with US markets closed for the Martin Luther King holiday. The US dollar managed to recover ahead of the daily close, but it ended the day with modest gains against most major rivals, and it remains vulnerable to further declines.
The main focus was on Japan Government Bonds (JGBs), as the 10-year note's yield jumped to 0.52%, pushing it to the upper end of the Bank of Japan's range.
The Bank of Japan is holding a monetary policy meeting this week, and rising yields have fueled speculation that policymakers will finally change their monetary policy.
Governor Haruhiko Kuroda's term expires in April, and speculation suggests that he will make changes to the ultra-loose policy before leaving. Masayoshi Amamiya, Deputy Chief of the BoJ, is the leading candidate for the next governor.
According to the Bank of Canada Consumer Survey, expectations for 1-year ahead inflation increased to a record 7.18% from 7.11% in the third quarter, while expectations for 2-year ahead inflation fell to 5.14% from 5.22% in the third quarter.
The EUR/USD pair is trading near 1.0815, while the GBP/USD pair is trading a few pips below 1.2200. The AUD/USD pair briefly traded above the 0.7000 level before settling at around 0.6950, while the USD/CAD pair oscillates around 1.3400. The USD/JPY pair has recovered from a new multi-month low of 127.21 and is now trading at 128.50.
Gold maintains its $1,900 level, now settling at $1,914, while crude oil prices fell, with WTI settling at $79.12 per barrel.