[MARKET ANALYSIS] DXY is rangebound, while USD/JPY fluctuates post-election

DXY: -0.1%

• Dollar is marginally softer in rangebound trade amid light pertinent catalysts from over the weekend and with key releases from the US scheduled later this week, including the NFP and CPI data. Nonetheless, there were some comments from Fed officials on Friday, including from Vice Chair Jefferson, who said current monetary policy is well-positioned to deal with what likely lies ahead, and future Fed moves will be driven by data and views on the outlook.

EUR/USD: +0.1%

• Ekes slight gains after returning to the 1.1800 handle late last week, but with further upside capped by a lack of drivers from the bloc, while comments over the weekend from ECB’s Cipollone provided very little to spur price action.

GBP/USD: Flat

• Lacks direction with price action stuck around the 1.3600 level amid further political headwinds for UK PM Starmer's premiership, with his chief of staff Morgan McSweeney resigning due to the Mandelson scandal.

USD/JPY: -0.2%

• Swung between gains and losses with initial advances seen after Japanese PM Takaichi's landslide election victory, with the LDP winning a majority and the ruling coalition seen winning a supermajority. However, the pair then wiped out its gains, given that the election win was highly anticipated, and as JGB yields climbed on the likelihood of future stimulus.

Antipodeans: AUD/USD +0.3% / NZD/USD +0.1%

• Antipodeans eked mild gains amid the constructive mood, but with upside limited in the absence of tier-1 data releases.

The DXY is showing rangebound behavior, suggesting limited volatility in the dollar as markets await significant US economic data this week, including NFP and CPI. The movements in USD/JPY reflect some initial excitement following Japan's election results, but with anticipated outcomes already priced in, further directionality may remain subdued. Overall, without clear catalysts, currency pairs are likely to maintain their current trajectories until the data releases shift market sentiment.