Greenback Struggles As Participants Digest Weekend Headlines

Major currency pairs have held tight ranges so far. A degree of spillover from Friday's weak Wall Street session coupled with worrying geopolitical reports from over the weekend may have provided some incremental support to the yen early on. North Korea test-fired eight missiles on Sunday, prompting a symmetrical response from the U.S. and South Korea, while Australia confirmed that one of its planes was cut off by a Chinese fighter jet in a "dangerous manoeuvre."

• Note that weekend headline flow was not all negative, as Beijing vowed to ease more COVID-19 restrictions, while U.S. Commerce Sec Raimondo revisited the idea of lifting some tariffs to tackle inflation.
• The yen now leads gains at the margin, with USD/JPY moving away from a four-week high printed last Friday. Regional risk barometer AUD/JPY briefly probed the water below Friday's low, as the Antipodeans sit near the bottom of the G10 pile.
• The Swiss franc, another traditional safe haven, has struggled for any topside impetus and underperforms as we type. The greenback also struggles, even as U.S. Tsy yields has ticked higher.
• The sterling has shed its initial gains, with focus on risks surrounding a potential no-confidence vote that could be called by Tory backbenchers against PM Johnson as soon as this week.
• China's Caixin Services PMI & Australia's Melbourne Institute inflation data will take focus in the Asia-Pac session, with little of note coming up after hours.