Currency market volatility today fell to its lowest since before the Covid-19 pandemic hit markets in March 2020.
Investors are sitting on the sidelines waiting for clearer signals on the inflation trajectory and how central banks will respond.
With an impending European Central Bank meeting on Thursday and US inflation data due the same day, and a US Federal Reserve meeting next week, currencies appear to be treading water.
Range-bound currency markets mean a fall in volatility. The Deutsche Bank Currency Volatility Index hit its lowest since February last year.
The US dollar found a bit of support today as investors prepared for the inflation data following weaker-than-expected jobs data, which has eased concerns about an early tapering of the Federal Reserve's monetary stimulus.
The euro fell marginally, weakened by the dollar's strength and data showing German industrial production numbers declined in April.
The British pound fell 0.2% to $1.4147 and the Australian dollar eased 0.2% to $0.7742, with both stuck in ranges seen over the past couple of months.
With recent trading channels tight, implied volatilities on both currencies have dropped to their lowest levels since early 2020, before markets were pummelled by the Covid-19 pandemic.
The Japanese yen dropped as the dollar rose, fetching 109.48 yen per dollar, down 0.2% on the day.
Cryptocurrencies dropped but trading was generally calm today.
Bitcoin earlier eased to a three-week low of $32,418, while ether fell 4% to a one-week low of $2,431.93.