Forex Open: USD Edges Higher on Thin Liquidity, Ceasefire Uncertainty

The US dollar edged higher in early Monday trade as thin liquidity and uncertainty over a shaky ceasefire weighed on risk sentiment, with the Canadian dollar outperforming as an oil proxy.

As is typical for a Monday morning, market liquidity remains very thin until more Asian centers come online. Prices are liable to swing around, so traders should exercise caution. The weekend news featured a shaky ceasefire and Iran temporarily leaving negotiations due to threats from former President Trump, though they later returned. The US dollar is a few ticks higher in very early trade, with J.D. Vance commenting that such ceasefires are always "a little bit messy." The Canadian dollar is an exception, catching a bid as an oil proxy amid higher crude prices.

For foreign exchange and currencies traders, the thin liquidity environment amplifies price swings and can lead to false breakouts or erratic moves. The USD's slight strength reflects a cautious risk-off tone, while the CAD's outperformance highlights the influence of commodity prices on currency pairs. Live FX prices and charts on NowPrice show how the market is reacting in real time, helping traders navigate the choppy conditions.

Looking ahead, traders will watch for further developments on the ceasefire and any comments from US officials. Key data releases later this week include US durable goods orders and the final Q1 GDP print, which could provide direction. Additionally, oil price movements will remain a focus for CAD pairs, while any escalation in geopolitical tensions could boost safe-haven demand for the USD and JPY.