Forex today: dollar mixed in risk-off tone ahead of key week

Forex today was dominated by a risk-off theme with the weakest currency being the pound and the yen picking up safe haven demand. 

Risk off markets had stocks on Wall Street gasping for air, led lower by the NASDAQ, while US yields remained subdued. The week ahead gets busy with central banks meeting and key data for many parts of the world. 

There were no news releases today, and instead, investors stayed on the sidelines for the most part with little activity in the FX space on the session. The DXY is down 0.1% at time of writing, having a hard time recovering on the 97 handle. The 10-year yields were unable to rally on 2.22% and were up just 0.4% on the session making gains ahead of the debt auction. However, rates are anchored as inflation expectations have been reduced of late. Nevertheless, the market still expects the Fed to hike 25bps on Wed. However, the bond market tells a story and is still not buying the Fed's optimism. The statement could be signalling uncertainty about the future and a dovish statement cannot be ruled out.

EUR/USD technicals turned bearish in the US session with the pair trading between 1.1232 and 1.1192. GBP/USD ending the day just above session low at 1.2638 with Moody's suggesting that the election outcome is a negative for the UK's credit profile. USD/JPY dropped on stops o/n but US yields propped up the pair ahead of this week's main catalysts for the major - 109.62 was the low. Hawkish comments from BoC's Snr Dep Gov Wilkins helped the loonie this afternoon that rallied to 1.3320 vs the greenback. As for the antipodeans, AUD managed a rally off 0.7521 to 0.7548 while the Kiwi as a chop between 0.7169 and 0.7222 with a bullish bias.

The day ahead:

AUD: The NAB Business Confidence - a survey of the current business condition in Australia. 

Key events from the US session 

US Dollar struggles to build on Friday's gains, floats above 97  

BoC Wilkins: Governing Council will assess if all monetary stimulus is still required

UK PM May to UK Conservative lawmakers: I'll serve you as long as you want me