USDCAD decreased to a 27-week low of 1.38. Over the past 4 weeks, US Dollar Canadian Dollar lost 4.13%, and in the last 12 months, it increased 0.5%.

Canadian Dollar Hits 27-week High

The Canadian dollar strengthened to C$1.38 per USD, its firmest level since October, after the Bank of Canada’s latest minutes revealed a notable backtrack from its earlier dovish rhetoric. While the governing council had discussed the possibility of another rate cut at its April 16th meeting, it ultimately chose to hold the policy rate steady at 2.75%, citing persistent core inflation near 2.8–2.9% and a surprisingly resilient labour market, with unemployment hovering at a multi-decade low of 2.2% in March. The minutes emphasized the need for caution, highlighting concerns that further easing could jeopardize inflation control efforts, thus reducing expectations for imminent rate cuts. Adding to the loonie’s momentum, preliminary data showed Canada’s economy grew 0.2% in Q1, avoiding a technical recession and contrasting sharply with the U.S., where output contracted 0.3% and ADP payrolls slumped to just 62,000 in April.

Canadian Dollar at Over 6-Month High

The Mexican peso hovered around 19.60 per USD, remaining near its highest level in over six months as investors digested the latest growth data. The Mexican economy avoided a technical recession with preliminary Q1 GDP growth of 0.2%, exceeding expectations of stagnation and rebounding from the previous quarter’s 0.6% contraction. Although the modest quarter-over-quarter expansion was enough to avert a technical recession, it does little to alter the broader picture of economic fragility. The outlook remains clouded by elevated domestic uncertainty, restrictive financial conditions, and ongoing vulnerability to spillovers from the U.S. trade war. Earlier data showed that unemployment fell to a record-low 2.2% in March while core inflation accelerated to 3.9% in mid-April, reinforcing expectations that Banxico may pause its easing cycle and helping to sustain a wide real-rate differential that continues to attract sizable carry-trade inflows.

Mexican Peso Steady After GDP Data

The Brazilian real weakened past 5.6 per USD, easing from the October 2024 high of 5.62 reached on April 29th, as investors digested the latest labor market data amid ongoing trade war uncertainties. Brazil’s unemployment rate rose to 7.0% in the first quarter—the highest since May 2024—signaling a less resilient labor market under the weight of restrictive borrowing costs and persistent trade uncertainty, and pressuring the central bank to abandon further tightening. At the same time, renewed trade-war jitters between Washington and Beijing threaten to sap demand for Brazil’s commodity exports, while softer oil and iron ore prices have begun to erode the currency’s traditional terms-of-trade advantage. Externally, U.S. GDP unexpectedly contracted at a 0.3% annualized pace in the first quarter, while ADP payrolls plunged to just 62,000 jobs in April, triggering safe-haven flows into U.S. assets despite the Fed signaling eventual rate cuts.

Brazilian Real Eases After Unemployment

The Canadian dollar eased toward C$1.39 per USD, holding near its six-month high, as markets digested the latest economic growth data and parsed the policy outlook under Prime Minister Mark Carney’s slender Liberal minority government. Canadian GDP unexpectedly contracted 0.2% in February—driven by a 2.5% slide in oil-and-gas output and a 0.5% drop in construction—and likely eking out just a 0.1% gain in March, underscoring tepid growth despite rebounds in mining and transportation. In the meantime, the Canadian Liberal Party secured a fourth consecutive term with a narrower margin than expected, placing slight pressure on the loonie. Mark Carney will lead a minority government and has so far prioritized securing trade deals beyond the US, underscoring Canada’s negotiating leverage. Meanwhile, the BoC has also warned that unresolved US tariff threats could tip Canada into recession, while signaling a broad economic stagnation should the trade war de-escalate.

Canadian Dollar Eases After GDP Data

The dollar index exchanged gains and losses to hover around 99.4 on Wednesday, set to drop nearly 5% in April and remaining relatively close to the three-year low of 98.3 from last week as evidence that tariffs negatively impacted economic activity aligned with the recent flight away from dollar-denominated capital markets. The US GDP contracted by 0.3% on an annualized basis in the first quarter amid soaring imports and a plunge in spending growth, contrasting with expectations of a slight expansion to mark the first decline since 2022. Also, PCE prices accelerated more than expected while employment growth measured by the ADP halved. Conversely, the Eurozone's GDP expanded more than markets expected, aligning with investors' preference to hold European assets.

Dollar Index Holds Monthly Plunge

The euro recovered from earlier losses but remained just below the $1.14 mark as investors weighed diverging economic signals from the U.S. and Europe. The U.S. economy unexpectedly contracted at an annualized rate of 0.3% in Q1 2025, largely due to a surge in imports as businesses and consumers moved to front-load purchases ahead of anticipated Trump administration tariffs. In contrast, the Eurozone economy grew by a stronger-than-expected 0.4%, driven by resilient domestic demand. Among major economies, Germany expanded by 0.2% as forecast, while France underperformed with a modest 0.1% increase. On the inflation front, German headline inflation eased to 2.1% in April but core pressures rose, while France’s annual rate held steady at 0.8%. Despite soft inflation, the euro remained on track for a monthly gain of over 5% against the dollar, as uncertainty over U.S. trade policy continued to undermine confidence in American assets.

Euro Recovers Slightly, Holds Below $1.14 Amid Diverging Economic Signals

The euro remained just below the $1.14 mark as investors processed fresh economic data and kept a close eye on ongoing trade developments. Germany’s GDP grew by 0.2% in Q1 2025, in line with expectations, driven by strong consumption and investment, while France posted disappointing growth of only 0.1%, held back by weak investment and exports. In contrast, Spain and Italy outperformed, with expansions of 0.6% and 0.3%, respectively. On the inflation front, France’s annual rate held steady at 0.8% in April, in line with expectations, while regional CPI data from Germany pointed to a continued easing of inflationary pressures. Despite this, the euro was set for a more than 5% monthly gain against the USD, as shifting U.S. tariff policies under the Trump administration dampened confidence in U.S. assets, weighing on the dollar.

Euro Remains Below $1.14 as Traders Digest Key Data, Set for 5% Monthly Gain

The New Zealand dollar held its recent decline to around $0.592 on Wednesday as ongoing trade uncertainty continued to weigh on sentiment. Investors remained cautious amid conflicting signals from the U.S. and China about the progress being made in de-escalating a trade dispute that threatens global growth. Adding downward pressure on the Kiwi, fresh data from China—New Zealand’s top trading partner—showed manufacturing activity contracted in April, reversing two months of recovery and keeping alive calls for further stimulus from Beijing. Domestically, sentiment was further dented by disappointing economic data. ANZ Bank survey showed New Zealand’s business confidence fell to a nine-month low in April, with most forward-looking activity indicators dragged down by concerns over U.S. tariffs.

New Zealand Dollar Holds Decline

The South Korean won strengthened to around 1,430 per dollar, extending gains for the third straight session to hit a one-week high, fueled by optimism over easing auto tariffs. On Tuesday, US President Trump signed an executive order softening automotive tariffs, addressing the stacked levies on vehicle imports, such as those on steel and aluminum, to reduce overall tariff burdens. Meanwhile, South Korea’s Finance Ministry said it isn’t rushing a trade deal with the US before its June 3 election, emphasizing due process and the need to align with its political timeline, despite speculation of a pre-election agreement. Investors also digested the latest economic data, with industrial production surging in March for the second consecutive month, driven by strong semiconductor output, while retail sales dipped, signaling weaker consumer spending. Traders now await additional key data releases this week, including trade balance, PMI, and inflation figures.

South Korean Won Rises for 3rd Day

The offshore yuan weakened to around 7.27 per dollar, as investors reacted to disappointing PMI data from China. On Wednesday, official figures showed manufacturing PMI contracted in April 2025 for the first time since January, falling from a one-year high in March and missing market expectations. Similarly, the services PMI edged down from a three-month high in the previous month, also falling short of forecasts. Meanwhile, a private survey revealed that manufacturing PMI dropped in April from a four-month high in the preceding month. The disappointing data reignited concerns about China's economic outlook amid ongoing trade tensions with the US, despite recent stimulus measures. In its latest update, China’s Foreign Ministry released a video on social media urging the international community to resist US economic aggression. Although the video does not directly mention the steep tariffs exchanged by both sides, it serves as a defiant message to the US and a call for global unity.

Offshore Yuan Weakens on Disappointing PMI Data

The Australian dollar edged higher toward $0.64 on Wednesday, recouping some losses from the previous session as investors digested the latest inflation data. Australia's headline inflation rose 2.4% in the first quarter, matching the previous quarter’s pace and slightly exceeding market expectations of 2.3%. However, core inflation eased to 2.9% from 3.3%, reinforcing expectations of a near-term rate cut. The Reserve Bank of Australia is widely anticipated to reduce its cash rate by 25 basis points to 3.85% in May, with markets pricing in further easing to as low as 2.85% by year-end. The outlook is being shaped by rising domestic economic uncertainty and heightened external risks, particularly from potential global fallout stemming from new US tariffs.

Australian Dollar Edges Higher After Inflation Data

The Japanese yen slipped to around 142.4 per US dollar on Wednesday, marking its second consecutive day of losses, as a string of disappointing economic data pressured sentiment. March figures showed that industrial production declined more than expected, while retail sales growth also fell short of forecasts—signaling potential headwinds for Japan’s economy. Attention now turns to the Bank of Japan’s upcoming policy decision, where the central bank is widely expected to keep interest rates unchanged at 0.5%. Policymakers are expected to take a cautious stance as they evaluate the potential impact of newly imposed US tariffs on Japan’s export-reliant economy. Adding to the mix, US Treasury Secretary Scott Bessent said Tuesday that the Trump administration held "substantial talks" with Japan regarding a possible trade agreement, offering some hope for easing bilateral tensions.

Yen Weakens on Soft Economic Data Ahead of BOJ Decision

The US dollar index held steady around 99.2 on Wednesday as investors stayed on the sidelines ahead of key economic releases that could offer insights into the early effects of recently imposed tariffs. Markets are closely watching the March PCE price index—the Federal Reserve’s preferred inflation gauge—and the first estimate of Q1 GDP, both due later today. On Tuesday, data showed the US goods trade deficit surged to a record $162 billion in March, far exceeding expectations, as import volumes jumped—likely driven by a rush to secure goods ahead of tariffs announced by President Trump on April 2nd. To cushion the impact of his new auto tariffs, President Trump signed a series of executive orders offering tax credits and relief from certain material levies. He also suggested that a trade deal with India could be imminent, while talks with Japan and South Korea were reported to be progressing.

Dollar Steady as Markets Await Key US Economic Data

The South African rand weakened slightly to around 18.6 per USD, pressured by a rising dollar and falling prices of precious metals, particularly gold. Fiscal uncertainty also weighed on sentiment, as markets awaited a revised national budget after a court blocked a proposed VAT hike and the fiscal framework. The budget standoff has become a major test for the Government of National Unity, formed after the ANC lost its majority in 2024. Finance minister Enoch Godongwana on April 24 announced that National Treasury would be walking back the 0.5 percentage point VAT hike that was set to kick in on 1 May. Godongwana initially proposed a 2% VAT hike in his February budget, which was delayed last minute due to coalition disagreements. The Ministry of Finance is scheduled to submit a revised edition of the Appropriation Bill and Division of Revenue Bill in May.

South African Rand Weakens

The dollar index held above 99.1 on Tuesday, recovering some ground after recent losses as investors digested fresh economic data and watched for updates on global trade. U.S. trade data showed the goods deficit jumped to a record $162 billion in March, well above forecasts, as imports surged—likely due to businesses and consumers rushing to buy goods before new tariffs announced by President Trump on April 2nd took effect. Meanwhile, consumer confidence fell for a fifth straight month in April to its lowest level since the early days of the COVID-19 pandemic, with expectations hitting a 13-year low. Job openings also declined more than expected. On the trade front, Treasury Secretary Scott Bessent described Chinese tariffs as “unsustainable for China” and noted that the U.S. was “very close” to securing a trade deal with India. Looking ahead, investors are awaiting first-quarter GDP and the Fed’s preferred PCE inflation gauge on Wednesday, followed by the April jobs report on Friday.

Dollar Holds Ground as Investors Digest Key Data, Tariff Headlines

The South African rand traded around 18.5 per USD, holding near its strongest level since early April, amid a broadly steady dollar as traders monitored global trade developments. On the domestic front, investors awaited an announcement from the finance minister regarding the timing of a revised national budget, after the Western Cape High Court over the weekend suspended the proposed VAT rate hike and set aside the adoption of the current fiscal framework. The 2025 budget dispute has become the biggest challenge for the Government of National Unity, formed after the ANC lost its parliamentary majority in last year's election. Finance Minister Enoch Godongwana announced on 23 April 2025 that the 0.5 percentage point increase in the VAT rate, due to take effect on 1 May 2025, wouldn’t be implemented but fierce opposition persisted. Godongwana initially proposed a 2% VAT hike in his February budget, which was delayed last minute due to coalition disagreements.

South African Rand Hovers Around 1-Month High

The British pound edged down to $1.338 but stayed near its highest level since February 2022, buoyed by a broadly weaker US dollar. Sterling remained up 3.8% in April, on track for its strongest monthly performance since November 2023. The UK is viewed as relatively insulated from US tariffs, which President Trump has paused until July. In 2024, the US posted a $12 billion goods surplus with the UK — in sharp contrast to its deficits with China and the EU — limiting potential damage from trade tensions. The pound is also supported by expectations that the Bank of England will be more cautious than peers in cutting interest rates, with markets pricing in about 85 basis points of easing this year, similar to the Fed. Investors are now focused on key upcoming US data, including jobs and inflation, for cues on the dollar’s direction. Meanwhile, reports of possible US tariff relief have eased some concerns, though broader trade risks with China continue to loom.

Sterling Heads for Best Month since 2023

The Indian rupee traded at the 85 per USD mark in April, testing its strongest since the start of the year, benefitting  from a weaker dollar and tracking the rally in Indian assets as the country's small dependence on exports make it relatively robust to recession concerns stemming from a US trade war. The rupee was also supported by limited outflows as higher oil output from OEPC+ nations and growth concerns in the US pressured crude oil and fuel prices, which make up most of Indian imports. The developments were enough to offset the outlook of lower interest rates by the Reserve Bank of India. The latest data showed that the Indian inflation rate fell to its lowest in over five years in March, well below the RBI's mid-point target of 4%. Additionally, the Indian GDP grew by 6.5% in the last financial year from 8.2% in the prior period, forcing the central bank to attend to growth concerns.

Indian Rupee Holds Near YTD-High

The Canadian dollar was at the 1.38 per USD mark, trading near its highest in six months as G10 currencies continued to be supported by a flight away from US dollar assets, while markets assessed the outlook of domestic economic policy under a newly-elected Liberal Party government. The Canadian Liberal Party won a fourth consecutive election by a relatively narrow margin, placing slight pressure on the loonie following expectations of a majority win, but still making former BoC and BoE Governor Mark Kearny Prime Minister of a minority government. The incumbent has so far refrained from prioritizing a trade deal with the US, underscoring Canada's leverage and opting to secure deals with other nations. In the meantime, the BoC noted that uncertain trade policy from the US risked a Canadian recession should the US proceed with its aggressive tariff package, while signaling a broad economic stagnation should the trade war de-escalate.

Canadian Dollar Trades Near 6-Month High on Liberal Win

The Canadian dollar weakened to around $1.39, reversing gains from the previous session, as investors awaited final election results, with concerns over US tariffs playing a role in the political discourse. Early projections suggested that Canada’s ruling Liberal Party could retain power, though final results remained uncertain, with the Liberals still short of the 172 seats needed for a majority in the 343-seat House of Commons. Mark Carney’s bid for a stronger mandate to manage US tariffs faced opposition from a stronger-than-expected Conservative challenge, raising the possibility of a minority government that may need to negotiate policy support, a situation that historically limits the longevity of Canadian governments. The Canadian dollar’s losses were partly mitigated by a renewed decline in the US dollar, driven by ongoing uncertainty over the US-China trade developments.

Canadian Dollar Dips as Election Results Awaited

The Australian dollar dipped toward $0.64 on Tuesday, pulling back from multi-month highs as global trade uncertainties dampened investor sentiment. China reiterated that it is not participating in trade negotiations with the US, countering claims by President Donald Trump that he had spoken with President Xi Jinping. US Treasury Secretary Scott Bessent added that it is "up to China" to ease tensions, noting China’s trade surplus with the US. Domestically, attention turns to Australia’s inflation data due Wednesday, which could influence the Reserve Bank of Australia's policy outlook. The RBA is widely expected to implement another 25-basis-point rate cut in May as it navigates growing global economic risks, including potential fallout from new US tariffs.

Australian Dollar Slips Amid Global Trade Jitters

The Japanese yen slipped to around 142.3 per dollar on Tuesday, paring gains of over 1% in the previous session as investors navigated global trade uncertainties. On Monday, the dollar weakened broadly amid a lack of progress on US-China trade relations, with Beijing denying that it is engaged in trade negotiations with Washington despite Trump’s claims. US Treasury Secretary Scott Bessent also insisted that it was "up to China" to deescalate trade tensions, while adding a trade agreement with India could be announced soon. Meanwhile, Japanese officials remain tight-lipped on ongoing trade talks with the US, although Finance Minister Katsunobu Kato hinted that currency issues could be part of broader trade negotiations. Investors now look ahead to the Bank of Japan’s monetary policy meeting this week, where it is widely expected to keep its policy rate steady at 0.5% as it monitors the potential impact of US tariffs on Japan’s export-driven economy.

Japanese Yen Eases After Sharp Gain

The New Zealand dollar hovered around $0.598 on Tuesday, following modest gains in the previous session, as investors weighed growing uncertainty over US-China trade developments. China again denied engaging in trade talks with the US, contradicting claims by President Donald Trump and his aides that negotiations are currently in progress. Treasury Secretary Bessent also said it is up to China to "de-escalate" the trade war, reversing Trump’s earlier suggestion that the US would ease tariffs first. The heightened uncertainty poses risks to the currency, given New Zealand’s heavy reliance on exports. Domestically, flat labor market data supported market expectations of a 90% chance the Reserve Bank will cut rates by 25 bps next month. Meanwhile, Finance Minister Nicola Willis said baseline spending in the 2025 budget will be cut due to worsening economic conditions, though the government still expects stronger growth and lower unemployment later this year.

Kiwi Dollar Steady Amid Trade Uncertainty

The offshore yuan strengthened around 7.29 per dollar, supported by a weakening greenback amid growing concerns over US-China trade developments. While Trump has claimed progress on trade with China and other countries, Beijing once again denied it is in talks with Washington, reinforcing its hardline stance on tariffs. Trump officials, including Treasury Secretary Scott Bessent, insisted that the US holds the upper hand in a trade war with China. Meanwhile, Beijing expressed confidence in meeting its full-year growth target of around 5% but refrained from announcing new stimulus actions during a press conference on Monday. This month, the PBOC eased its control on the yuan, allowing it to weaken past 7.2, but kept guidance stronger than expected, signaling a move to balance stability with flexibility in response to tariff pressures. Traders are also watching China’s April manufacturing data for signs of any impact from U.S. tariffs on Chinese goods.

Offshore Yuan Rises on Weaker Dollar

The dollar index hovered around 99 on Tuesday after a sharp decline in the previous session, weighed down by heightened uncertainty in US-China trade relations. China reiterated that it is not engaged in trade talks with the US, clarifying that President Xi Jinping has not called President Donald Trump, despite Trump’s claim in a recent Time interview. Meanwhile, US Treasury Secretary Scott Bessent asserted that it is "up to China" to deescalate tensions, noting that China exports significantly more to the US than it imports. Looking ahead, investors are awaiting key economic releases, including the first-quarter GDP and the Fed’s preferred PCE inflation gauge on Wednesday, as well as the April jobs report on Friday, to assess the Federal Reserve’s policy outlook. Signs of softening economic data could strengthen expectations for earlier rate cuts by the Fed.

Dollar Pressured by US-China Trade Uncertainty

GBPUSD increased to a 3-year high of 1.34. Over the past 4 weeks, British Pound US Dollar gained 4.06%, and in the last 12 months, it increased 7.03%.

British Pound Hits 3-year High

The Mexican peso hovered below 19.6 per USD, near its highest level in over six months of 19.51 seen April 25th, buoyed by a hawkish Bank of Mexico outlook and broad-based dollar softness. At home, unemployment hit a record-low of 2.2% in March, underscoring labor-market resilience under restrictive policy, while core inflation accelerated to 3.9 % in mid-April—the highest since September 2024—reinforcing Banxico’s decision to maintain its 11 % benchmark rate. That wide real interest-rate differential continues to attract carry-trade inflows, even as a “very productive” call between Presidents Trump and Sheinbaum allayed fears of U.S. tariffs on steel, autos and produce. Steady oil-export revenues further bolster Mexico’s external accounts, while a softer dollar—driven by fading hopes for a rapid U.S.-China trade resolution—has prompted investors to reassess U.S. assets in favor of higher-yielding alternatives.

Mexican Peso Hovers Below 19.6 USD

The dollar index weakened to 99.5 on Monday, trimming gains from last week as traders braced for a torrent of data poised to reveal the early effects of President Trump’s tariffs. March’s PCE release is expected to show headline inflation around 2.2% year-over-year and core prices up just 0.1% month-on-month—the softest core reading since March 2021—strengthening the case for a Federal Reserve pause or even rate cuts by mid-2025. At the same time, tentative U.S.-China tariff reprieves—select exemptions in the absence of a formal agreement—have undercut the dollar’s safe-haven premium. With April’s jobs report, first-quarter GDP figures and the Fed’s preferred inflation gauge all due this week, any downside surprises could further entrench expectations of earlier Fed easing. Last week’s dollar support—sparked by Mr. Trump’s hint at softer Chinese levies and his retreat from threatening Fed Chair Powell—has already begun to unwind, leaving the greenback on the back foot.

Dollar Eases as Traders Brace for Busy Week

The euro traded slightly below the $1.14 mark, pulling back from the three-year high of $1.1573 reached on April 21, as investors braced for a busy week of economic data and continued to monitor developments on the trade front. Signs of easing US-China trade tensions last week lent some support to the dollar, although Beijing continued to reject President Trump’s claims that tariff negotiations between the two countries were underway. This week, market focus will shift to inflation data from both the Eurozone and the US, along with Friday’s highly anticipated US nonfarm payrolls report. On the monetary policy front, the European Central Bank cut its deposit rate by 25 basis points to 2.25% last week, bringing borrowing costs to their lowest level since early 2023. The ECB also removed references to its policy stance being “restrictive,” while cautioning that the economic outlook has deteriorated amid rising trade tensions.

Euro Retreats from 3-Year High as Data-Heavy Week Begins

The British pound is trading around $1.332, close to a 7-month high of $1.338, as easing US-China trade tensions boosted investor sentiment and reduced demand for safe-haven assets. US President Trump mentioned ongoing tariff talks with China, signaling a potential de-escalation of the trade war, which had raised recession fears. However, economists warn that the trade war is weakening the US economy, with declining trade and reduced business activity. In the UK, the EY Item Club forecasts a slowdown in economic growth due to Trump's tariffs, lowering its 2025 GDP growth projection to 0.8% from 1% and cutting its 2026 forecast to 0.9%. This slowdown is attributed to the global tariff war's impact on consumer spending and business investment. The UK’s data calendar is light this week, with only the Nationwide House Price Index and Bank of England’s money and credit indicators scheduled for release.

Sterling Holds Close to 7-Month High

The South Korean won depreciated past 1,440 per dollar on Monday, extending losses from the previous week as the US dollar remained strong amid easing US-China trade tensions. US President Donald Trump indicated a willingness to ease 145% tariffs on Chinese goods, while China removed certain American goods from its 125% tariffs. However, the depreciation of the won was partially offset following a recent US-South Korea meeting, in which US Treasury Secretary Scott Bessent described the talk as “very successful.” Last week, the US and South Korea agreed to pursue a tariff-relief package slated for July, with negotiations expected to center on key sectors including autos, shipbuilding, energy, and currency policy. Domestically, investors are awaiting a range of economic data in the coming days, including industrial output, retail sales, trade figures, and inflation, to gain deeper insights into South Korea's economic health amid the ongoing impact of US tariff measures.

South Korean Won Extends Fall

The Australian dollar weakened below $0.64 on Monday, declining for a second straight session as the US dollar extended gains amid easing global trade tensions. Last week, US President Donald Trump signaled openness to reducing Chinese tariffs, while Beijing exempted certain US goods from its 125% levies. Investors also remained cautious ahead of expected stimulus announcements from China to counter the economic impact of US tariffs. Domestically, focus turns to Australia’s latest inflation report due Wednesday, which could shape expectations for Reserve Bank of Australia policy. The RBA is widely anticipated to deliver another 25-basis-point rate cut in May, as policymakers brace for potential fallout from newly imposed US tariffs.

Australian Dollar Slips as US Dollar Strengthens

The Japanese yen slipped toward 144 per dollar on Monday, extending last week’s losses as the dollar strengthened amid easing global trade tensions. Last week, Japanese Finance Minister Katsunobu Kato and US Treasury Secretary Scott Bessent held a closed-door meeting on the sidelines of the IMF and World Bank spring meetings in Washington. While Kato remained tight-lipped on the discussions, he emphasized that Japan and the US would continue close and constructive dialogue on exchange rates, hinting that currency issues could be part of broader trade negotiations. Japan’s top trade negotiator, Ryosei Akazawa, is also set to visit Washington this week for a second round of bilateral talks. Meanwhile, the Bank of Japan is widely expected to keep its policy rate steady at 0.5% this week as it monitors the potential impact of US tariffs on Japan’s export-driven economy.

Japanese Yen Slips on Dollar Strength

The New Zealand dollar fell to around $0.594 on Monday, extending losses from the previous session, pressured by a rising US dollar amid signs of easing US-China trade tensions. However, despite hopes of de-escalation, reports indicated that Chinese manufacturers are halting production and seeking new markets in response to US tariffs, with the resulting decline in orders also affecting employment. Although not yet widespread, China’s business interruptions could, in turn, hurt New Zealand’s exports, given China’s role as a key trading partner. Meanwhile, growing expectations of additional monetary stimulus from the Reserve Bank of New Zealand are adding further pressure on the Kiwi. Markets continued to price in a 25-basis-point rate cut at the RBNZ’s May meeting, with interest rates seen potentially bottoming at 2.75% by year-end.

New Zealand Dollar Declines

The offshore yuan slightly weakened to around 7.30 per dollar, pressured by a rising US dollar as investors positioned ahead of key economic reports that could influence Federal Reserve monetary policy. Investors are also eyeing trade developments after US President Trump signaled that another pause of reciprocal tariffs was unlikely. Last week, the US and China appeared to ease tensions, with Trump open to reducing tariffs and China exempting some imports from its 125% levies, although Beijing denied trade talks were occurring despite Trump’s claims of progress. At home, China’s Finance Minister Lan Fo’an pledged more proactive macro policies to support growth over the weekend, with authorities set to hold a press conference later today. Meanwhile, Chinese manufacturers are halting production and seeking new markets as US tariffs continue to weigh on exports. However, industrial profits returned to growth in the first quarter, offering some optimism for the yuan.

Offshore Yuan Dips on Stronger Dollar

The dollar index edged above 99.5 on Monday, extending last week's gains as investors positioned ahead of key economic reports that could reveal early impacts from President Donald Trump's tariffs. Markets are closely watching the April jobs report due Friday, along with first-quarter GDP figures and the Fed-preferred PCE inflation gauge on Wednesday. Weaker-than-expected data could strengthen expectations for earlier interest rate cuts from the Federal Reserve. Last week, the dollar found support after Trump signaled a willingness to ease Chinese tariffs, while Beijing exempted certain US goods from its 125% levies. Confidence also stabilized after Trump backed off his threat to remove Fed Chair Jerome Powell. The dollar strengthened broadly, advancing against all major currencies.

Dollar Firms Ahead of Key Economic Reports

The Swiss franc traded around 0.83 per USD, holding close to its lowest since early April, as the dollar gained ground on improved investor sentiment amid optimism over softening U.S.-China trade tensions, fueled by reports of possible Chinese tariff exemptions. In parallel, the Trump administration hinted it could reduce tariffs on Chinese imports, depending on the progress of talks with Beijing. On the domestic front, Swiss National Bank Chairman Martin Schlegel cautioned that rising global economic risks are likely to weigh on Switzerland’s growth outlook. Speaking at the central bank's annual general meeting, he noted, “It remains very uncertain how inflation and the economy in Switzerland will develop.

Swiss Franc Lags as Dollar Surges

The offshore yuan stabilized around 7.28 per dollar after a brief decline earlier in the session, as investors assessed supportive remarks from PBoC Governor Pan Gongsheng and potential signs of easing US-China trade tensions. During the G20 Finance Ministers and Central Bank Governors Meeting, Pan emphasized that China’s economy had a strong start to the year and continues to recover, with financial markets remaining broadly stable. He also reaffirmed the central bank’s commitment to maintaining an “appropriately loose” monetary policy to support high-quality development. Meanwhile, US President Donald Trump stated late Thursday that trade negotiations with China are ongoing, contradicting Beijing’s earlier claim that no talks are currently taking place. A White House official later clarified that lower-level in-person meetings had occurred, along with a phone call between US and Chinese representatives earlier in the week.

Offshore Yuan Steady on PBOC Assurances, Trade Optimism

The New Zealand dollar edged lower to around $0.598 on Friday but remained on track for its third consecutive weekly advance, amid optimism over U.S.-China trade talks. President Donald Trump asserted on Thursday that negotiations between Washington and Beijing are ongoing, countering claims by China that no discussions had taken place. Earlier this week, Trump hinted at easing his aggressive trade stance with China—New Zealand’s largest trading partner—suggesting a significant reduction in his steep tariffs on Chinese imports. Domestically, expectations of further monetary easing from the Reserve Bank of New Zealand continue to weigh on the currency. Markets remain fully priced for a 25bps rate cut at the RBNZ’s May meeting, with rates seen potentially bottoming at 2.75% by year-end.

New Zealand Dollar Heads for 3rd Weekly Gain

The Australian dollar slipped below $0.64 on Friday, paring gains from the previous session as the greenback strengthened on signs of easing global trade tensions. Investor sentiment shifted after US President Donald Trump reaffirmed that trade negotiations with China are ongoing, despite Beijing's denial. Talks with Japan and South Korea also appeared to be making headway. Additionally, Trump softened his stance on Federal Reserve Chair Jerome Powell, stating he never intended to replace him, a move that reassured markets and supported the dollar. On the domestic front, data released earlier this week showed that Australian private sector activity expanded for the seventh consecutive month in April, driven by solid growth in both manufacturing and services. Despite the positive economic indicators, the Reserve Bank of Australia is widely expected to deliver another 25 basis point rate cut in May, as the country prepares for potential economic fallout from newly imposed US tariffs.

Australian Dollar Eases on Greenback Strength

The Japanese yen slipped to around 143 per dollar on Friday, reversing gains from the previous session as the dollar strengthened on signs of easing global trade tensions. US President Donald Trump insisted that negotiations between the US and China are underway, despite denials from Beijing. Additional signs of advancement in trade talks with Japan and South Korea also supported the dollar. Trump further calmed markets by softening his stance toward Federal Reserve Chair Jerome Powell, stating he never intended to replace him, a reversal from previous criticism that had added uncertainty around monetary policy leadership. On the domestic front, data showed that Tokyo’s core inflation rate, a leading indicator of nationwide price trends, surged to a 2-year high of 3.4% in April. This complicates the Bank of Japan’s task in balancing risks from higher US tariffs and rising prices, with the central bank expected to hold rates steady next week.

Yen Weakens as Dollar Gains on Trade Optimism

The South Korean won extended its recent decline toward 1,435 per dollar, weighed down by a rise in the US dollar as investors assessed ongoing trade negotiations. President Trump reiterated that negotiations with China are underway, despite Beijing's denial. Earlier in the week, Treasury Secretary Bessent said major tariff cuts were needed for serious US-China talks, while Trump eased concerns by clarifying he won’t replace Fed Chair Powell. South Korea and the US also agreed to shape a trade deal aimed at removing the new US tariffs before the reciprocal tariff pause lifts in July, as revealed by Seoul's delegation after their first round of talks in Washington. Meanwhile, South Korea's economy unexpectedly contracted in the first quarter, with stalled exports and consumption amid concerns over the impact of Washington's aggressive tariffs, fueling expectations for further interest rate cuts.

South Korean Won Extends Losses

The US dollar index climbed above 99.5 on Friday, recovering from the previous session’s losses, after President Trump reaffirmed that trade negotiations with China are ongoing despite denials from Beijing. The dollar also found support amid signs of progress in ongoing trade discussions with Japan and South Korea. Earlier in the week, Treasury Secretary Bessent emphasized that tariffs between the US and China would need to be significantly reduced to pave the way for meaningful negotiations, underscoring the need for de-escalation between the world’s two largest economies. Elsewhere, Trump softened his stance on Fed Chair Powell, stating he never intended to replace him, a move that helped ease investor uncertainty around central bank leadership. Meanwhile, Cleveland Fed President Beth Hammack suggested a potential rate cut could come as early as June if justified by economic data, a comment that briefly pressured the dollar before it rebounded on trade optimism.

Dollar Gains as Trump Reignites Hopes for US-China Trade Talks

The Mexican peso strengthened past 19.6 per USD in late April, marking its highest level in over six months, buoyed by broad-based U.S. dollar weakness and expectations of a persistently hawkish stance from the Bank of Mexico. Mid-April data showed core inflation accelerating to 3.9% annually—the highest since September 2024—reinforcing the case for keeping Banxico’s benchmark rate at a restrictive 11%. Mexico’s wide real rate differential continues to attract robust carry-trade inflows, while reassurance from a “very productive” call between Presidents Trump and Sheinbaum eased concerns over potential U.S. tariffs on steel, autos, and tomatoes. Additionally, steady oil export revenues continue to support Mexico’s external accounts. Meanwhile, the weakening dollar reflects growing doubts over a swift resolution to U.S.–China trade tensions, prompting investors to reevaluate the appeal of U.S. financial assets.

Mexican Peso at Over 6-Month High

The dollar index extended earlier losses to below the 99.4 mark on Thursday, trimming last sessions rebound to remain near the three-year lows of 98 from earlier this week as skepticism over a US-China trade deal maintained concerns over the sustainability of US exceptionalism. Chinese officials claimed that Beijing will not engage in talks of a trade deal with the US before Washington lowers tariffs on China. The statement extended doubts on how straightforward a resolution to the trade war between both countries may be, pressuring the dollar, US equities, and Treasuries to resemble lingering doubts on the safety of US financial assets. Funds also noted flights to gold and foreign assets after President Trump threatened to remove Fed Chair Powell from office, erasing the central bank's autonomy, before backtracking and clarifying that Powell will remain Chairman.

US Dollar Index Reapproaches 3-Year Low

The South African rand strengthened toward 18.6 per USD, reaching the highest level since early April, after the finance ministry announced the withdrawal of the proposed 0.5% Value Added Tax (VAT) increase, which was scheduled to take effect on May 1. The National Treasury informed that the decision came after extensive consultations with political parties and careful consideration of recommendations from parliamentary committees. The planned VAT hike had become a major sticking point among coalition partners, threatening the stability of the government in recent months.

Rand Rallies on Fiscal Policy Reversal

The Australian dollar held steady around $0.636 on Thursday, following a bout of heightened volatility in recent sessions, as investors continued to monitor rapidly evolving global trade developments. Market sentiment was mixed after reports suggested the Trump administration is considering reducing tariffs on Chinese imports, contingent on potential talks with Beijing. China signaled openness to negotiations, provided Washington halts further threats. However, U.S. Treasury Secretary Scott Bessent tempered expectations, noting that no unilateral tariff cuts have been proposed and formal talks have yet to begin. On the domestic front, recent data showed that Australian private sector activity expanded for a seventh consecutive month in April, supported by robust growth in both the manufacturing and services sectors.

Australian Dollar Steadies Amid Global Trade Uncertainty

The New Zealand dollar appreciated to around $0.596 on Thursday, buoyed by renewed optimism over potential progress in the U.S.-China trade dispute. U.S. Treasury Secretary Scott Bessent on Wednesday stated that high tariffs between the U.S. and China are unsustainable, signaling potential de-escalation. President Donald Trump has also reiterated his intention to lower tariffs on China, but insisted the timeline for any relief will depend on Beijing. At the same time, the Kiwi dollar benefitted from broad-based weakness in the U.S. dollar. Domestically, sentiment was further lifted by encouraging economic data. The ANZ-Roy Morgan Consumer Confidence Survey showed consumer confidence rose to a four-month high in April (98.3 vs 93.2 in March), shoring up the upward trend that was starting to look wobbly.

New Zealand Dollar Rises

The offshore yuan dropped to around 7.29 per dollar on Thursday, reversing gains from the previous session, as investor sentiment turned cautious following remarks from US Treasury Secretary Scott Bessent. Hopes for easing trade tensions between the US and China were dampened after Bessent emphasized that no unilateral tariff reductions had been proposed and that formal negotiations had yet to commence. Recently, US President Trump appeared to soften his stance toward China, while Beijing indicated a willingness for trade talks. However, the lack of concrete commitments has left markets in a state of wait-and-see, prompting a pullback in the yuan and a broader cooling of recent investor optimism. Meanwhile, in China, the State Administration of Foreign Exchange committed to curbing excessive exchange rate fluctuations and preventing abnormal cross-border money flows. It also vowed to enhance regulatory oversight, expand its policy toolkit, and correct pro-cyclical market behavior.

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