US Dollar softer as US markets reopen, S&P set to drop – ING

💡 DMK Insight

The dollar’s softness post-holiday could signal shifting sentiment among traders. With the S&P 500 expected to open 1.5% lower, this might indicate a risk-off mood as investors reassess their positions. The USD/JPY pair’s resilience stands out, suggesting that while the dollar weakens, there’s still demand for it against the yen—often seen as a safe haven. Traders should keep an eye on the broader implications of this dollar movement, especially if it leads to increased volatility in equity markets. If the S&P breaks below key support levels, it could trigger further selling pressure, impacting correlated assets like commodities and risk-sensitive currencies. Watch for any shifts in economic data releases this week that could influence the dollar’s trajectory, particularly employment figures or inflation reports. On the flip side, if the dollar strengthens unexpectedly against the yen, it could indicate a flight to safety, which might catch many traders off guard. Keeping tabs on the USD/JPY levels will be crucial for gauging market sentiment moving forward.