Low trading volumes can be simple called the theme for today and likely for the rest of the week as we can see the market caught in a tight trading range with the dollar slightly lower and the euro consolidating above $1.30 around opening levels.
Investors are sidelined and enjoying the thin trading volume to stay away from the market with the low flow of data this week. The holiday spirit started showing on the market since last week with the relief gains across the board and the market is still consolidating around the closing levels set on Friday.
The outlook for the global economy and the debt crisis are still the main focus, with the latter of predominant focus. Investors will surely have only the Italian bond sale scheduled for Wednesday and Thursday to gain insight into what is waiting ahead, though generally calm trading will be dominant for the week.
Europe's agony is the concern for investors and the major factor shaping the outlook for the global economy and whether major nations can withstand the heat. The haven demand on the dollar is expected still to continue with the start of the year especially as the greenback is also supported by overall above than expected macroeconomic data.
With the Italian debt sale still in focus tomorrow and despite the thin trading volume, chances for a surprise should still be taken into consideration due to the same reason that investors can easily and sharply move the market on the back of the thin volume.
For today the calm holiday trading and news flow is encouraging and no surprises are yet seen. The USDIX is holding lower for now around 79.83 down nearly 0.20% trading between the high of 80.06 and the low of 79.79.
The EUR/USD on the other hand is trading nearly flat around $1.3065 between the high of today at $1.3083 and the low of $1.3044.