Forex Today: A Gentle Start to 2026

Welcome back to the first full trading day of 2026! As anticipated, the markets are still shaking off the holiday cobwebs, making for a relatively quiet start to the year. Here is what you need to know on Friday, January 2nd:

Low Liquidity Dominates Early Trade

With many participants still on extended holiday breaks, liquidity remains noticeably thin across major currency pairs. This often leads to choppier price action on lower volumes, or conversely, a lack of significant directional moves. Traders are advised to exercise caution and adjust position sizes accordingly, as sudden spikes or dips can occur more easily in these conditions.

USD Holds Steady Amidst Calm

The US Dollar is showing a relatively stable performance this morning, hovering in tight ranges against its major counterparts. There are no significant economic data releases expected today from the US, allowing market participants to digest the latest Federal Reserve minutes from December, which pointed towards a cautious optimism regarding future rate path. Any slight movements are likely technical in nature rather than driven by fundamental news.

Euro and Sterling Await Fresh Catalysts

Both the Euro and the British Pound are trading flat against the Greenback. European and UK markets are also feeling the post-holiday lull, with no high-impact data on the immediate horizon. Investors will be keeping an eye on the broader sentiment and any early indications of economic activity as we head further into January.

Looking Ahead

As we navigate this subdued start to the new year, attention will gradually shift towards the first major economic releases of 2026. Next week promises a busier calendar with key inflation data and employment figures from major economies, which could provide the much-needed catalysts to kickstart more sustained market trends. For now, enjoy the calm before the potential storm!

Source: Original Article