Weekend television reports showed the streets of Paris ravaged by riots, and in early morning trading in Sydney, the euro-dollar pair opened lower, falling to around 1.1180.
However, once Tokyo market participants joined the trading session, the pair quickly rebounded to around 1.1230.
In the European market, the pair also briefly dipped to around 1.1190 but was pushed back up to the 1.1220 level.

The fact that the euro-dollar pair isn’t falling even as the situation in Europe worsens suggests that the market’s focus has shifted from the turmoil in French government bonds to concerns over excessive investment in AI.
That is the greater concern.

While we’ll want to gauge the direction of the U.S. stock market this week, the market has begun to view excessive investment in AI and the slowdown in data center construction as potential triggers for a U.S. recession.
Until these concerns are dispelled, I expect the dollar to remain somewhat weak.

Governor Ueda’s remarks at the National Securities Convention were released, but as they were in line with his previous statements, they were not viewed as significant news.
Today, there was significant buying to cover the short euro positions that were sold off yesterday, suggesting traders are preparing for the next market move.
While the French presidential election is on investors’ minds, the election isn’t until April 18 of next year—far too distant to keep driving the same market narrative.

Next week will bring policy announcements from major central banks, including the FOMC, the ECB, and the Bank of Japan.
Incidentally, the central banks of New Zealand and Canada will also be making announcements.
It might be a good idea to relax a bit in preparation for next week.

For the time being, position adjustments appear to be the dominant trend.