At the onset of the new trading week, the foreign exchange market exhibits a subdued atmosphere. As the North American session prepares to commence, the dollar is exhibiting minimal fluctuations, hovering within a range of approximately +/- 0.10% against the majority of G10 currencies.

Noteworthy developments include Japanese indices reaching new 30-year highs, contrasting with the persistent downturn in Chinese mainland and Hong Kong stocks. In Europe, the Stoxx 600 shows a modest uptick of around 0.4%, while US index futures extend their prior gains that propelled the S&P 500 and Nasdaq 100 to record highs preceding the weekend.

Gold, while exhibiting softness, is maintaining a tranquil trade within a $6-range around the $2025 mark. Meanwhile, March WTI remains relatively stable, holding its position near $73.40.

Asia Pacific
Following the People's Bank of China's decision not to cut the benchmark one-year Medium-Term Lending Facility rate last week, Chinese banks have retained their loan prime rates. Indications suggest that officials are signaling additional economic support in the coming days.

The dollar initiates the week with a three-week upward trajectory against the Japanese yen, fueled by the rise in US rates and the anticipation that the Bank of Japan, convening this week, is unlikely to adjust its policy until at least April.
The Australian dollar requires a breakthrough above the $0.6640-60 range to signal a more significant move beyond consolidation.

Europe
The euro experienced a 0.5% decline last week, concluding the week below $1.09 for the first time since mid-December. Although it briefly ascended to nearly $1.0910, it faced downward pressure, retreating to session lows around $1.0885.

Sterling remains within the $1.26-$1.28 trading range, testing the lower boundary last week. It reached a four-day high around $1.2725 earlier today but struggled to sustain upward momentum, hovering around the $1.27 area.

America
Federal Reserve officials, in their recent forecasts and statements at the December FOMC meeting, expressed increased confidence in achieving a soft landing. Positive data releases in the past week, including stronger-than-expected retail sales, a modest gain in industrial output, and the lowest weekly jobless claims since September, further bolster this confidence. Inflation expectations have eased more than anticipated, with the one-year outlook at 2.9%, the lowest since the end of 2020, and the five-year outlook slipping to 2.8% from 2.9%, matching last year's low.

The Canadian dollar saw a noteworthy rally of nearly 0.45% before the weekend, marking its most substantial advance in over three weeks, potentially influenced by the risk-on sentiment reflected in the robust rally in the US equity market. The US dollar has retreated to around CAD1.3420 today.