Currency volatility remains subdued, but looming central bank actions and President Trump’s Asia trip could soon reignite market swings, Commerzbank's FX analyst Michael Pfister notes.

Central bank decisions and US-Asia trip set to stir markets

"The latest tariff news has not caused much movement in the foreign exchange markets. However, it is important to realise that these movements are simply no longer sustainable. In EUR/USD, the movements from the start to the end of a trading week are actually smaller than they were in spring."

"This is, however, completely understandable, as the major turbulence of the trade war is probably behind us. Furthermore, although the standard deviation of intraday movements may have been quite low in some weeks, it is not exceptionally lower than in mid-April overall. Therefore, it is possible that the past few weeks have not been as calm as expected, even if the movements were overall not sustainable."

"The US President's trip to Asia will probably bring further news, while the Bank of Canada, the Bank of Japan, the Fed and the ECB will also be making decisions. A wealth of data is on the agenda, albeit without US data due to the government shutdown. However, this could change soon, as recent reports suggest that progress could be made this week. Perceived volatility is therefore also likely to increase again this week."