After an active start to the week, early market activity today points to a steady continuation of trends, with several noteworthy developments shaping sentiment.

Key highlights include:

Steady Currency Moves: USD/CAD is up 0.25% this morning, while GBP/USD holds on to recent gains, rising 0.05%. EUR/USD is also up 0.05%, following a year-to-date high reported yesterday in early trading.

Trump's Tariff Announcement: Reports that Donald Trump is considering a 10% tariff on Chinese imports have not caused significant concern in the market. Observers suggest the proposal appears measured and less aggressive than anticipated, muting any immediate reaction.

Tech Sector Boost: U.S. equity futures are signaling a strong rally, buoyed by optimism surrounding a $500 billion AI investment plan announced by Trump. This has bolstered sentiment across much of the tech sector.

Currency Highlights

USD Weakness: The Bloomberg Dollar Spot Index fell 0.2% yesterday, with the U.S. dollar declining against most of its G10 peers. EUR/USD reached a fresh year-to-date high, reversing many of its earlier losses from the beginning of the year.

Canadian Dollar Activity: The Canadian dollar had the most significant FX-adjusted move among G10 currencies. According to data from the Depository Trust and Clearing Corporation, there is still strong demand for topside strikes on the loonie, though much of the notional trading remains marginally in favor of CAD strength. Whether this reflects a protective hedge or a predictive stance on long-dollar positions remains uncertain.

Looking Ahead

Traders continue to focus on options market activity, with interest in lower U.S. dollar strikes potentially reflecting cautious sentiment. Market participants are weighing whether this represents a buying opportunity for the dollar or a broader shift in positioning. Meanwhile, strong equity market momentum, particularly in tech, may guide sentiment in the coming sessions.