Currency Currencies: Dollar Dynamics and Central Bank Watch

Major currencies, particularly the Canadian and Australian dollars, are drawing attention ahead of central bank meetings. With the U.S. dollar's previous surge appearing to slow, analysts label it a 'tired' currency. The euro rises amid European political changes, while investors eye key economic meetings globally this week.

The spotlight is on the Canadian and Australian dollars as central bank meetings unfold this week. While the U.S. dollar has been on a strong trajectory post-election, analysts now describe the currency as 'tired', suggesting it may falter with a Federal Reserve rate cut looming.

Analysts at Morgan Stanley recommend shorting the dollar, labeling the 'pain trade' as the overextended positions might challenge investors moving forward. Meanwhile, the euro sees some volatility due to political shifts in Europe, yet it managed to finish the week on a positive note.

Key upcoming events include the European Central Bank meeting on Thursday and China's Central Economic Work Conference. Market watchers anticipate possible rate cuts that could further affect global currencies, notably with deep cuts expected from central banks in Canada and Australia.

(With inputs from agencies.)