Forex Today: Year-end markets spin a tight circle ahead of midweek holiday

Markets are struggling to find a reason to move too much in either direction ahead of the New Year's market closures, which will see most global exchanges shuttered during the middle of the trading week.

Here's what you need to know heading into Tuesday, December 31

The US Dollar Index (DXY) churned in place on Monday, cycling near the 108.00 handle as investors take the year-end sessions off. Market momentum has evaporated with global markets taking the holiday season off. Except for some last-minute position adjustments and a smattering of over-eager market participants, market volumes are horrifically constrained as the calendar grinds toward the New Year's Eve midweek market closure. Following the death of former President Jimmy Carter this week, US officials have flagged January 9 as an additional holiday in observance of Jimmy Carter's contributions to the US and the world.

EUR/USD saw some rough chop on Monday, testing 1.0450 before settling back into the 1.0400 handle. Market flows have cooled significantly during the holiday season, keeping Fiber constrained and on a tight leash near recent lows.

GBP/USD caught a similar downside move to kick off the new trading week, falling back into 1.2550 as Cable traders wait for a reason to bid the Pound Sterling. Some rough chop is expected in the near-term as market flows remain tight, and a lack of meaningful economic data from the UK side of things is doing little to provide directional bias for Cable traders.

AUD/USD is poised for a thunderously quiet week with Australian markets dark for the entire front half of the trading week, however some key Chinese activity figures due this week could have a knock-on effect on the Aussie. Chinese NBS Manufacturing and Non-Manufacturing Purchasing Managers Index (PMI) figures are due early Tuesday, followed by the Caixin Manufacturing PMI on Thursday.