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.

Offshore Yuan Returns to Fall

The Japanese yen strengthened past 143 per dollar on Thursday, snapping a two-day losing streak as investors turned to safe-haven assets amid renewed trade uncertainty. Market sentiment shifted after reports emerged that the Trump administration is considering reducing tariffs on Chinese imports, pending potential negotiations. China, in turn, signaled openness to talks—on the condition that Washington halts further threats. However, U.S. Treasury Secretary Scott Bessent tempered optimism, noting that no formal negotiations have begun and no unilateral tariff cuts have been proposed. Adding to the cautious mood, the U.S. reportedly informed Japan’s trade delegation that Tokyo would not receive special treatment under Washington’s current tariff regime, despite Japan’s calls for a policy review.

Yen Strengthens Amid Trade Uncertainty

The dollar index slipped to around 99.6 on Thursday, easing after two consecutive sessions of gains, as investors took stock of President Donald Trump’s shifting stance on Chinese tariffs. The Trump administration is reportedly considering lowering tariffs on Chinese imports pending talks with Beijing, while China signaled openness to trade talks on the condition that Washington refrains from further threats. However, optimism was tempered by comments from US Treasury Secretary Scott Bessent, who clarified that Trump has not proposed any unilateral tariff cuts and that formal negotiations have yet to begin. Separately, President Trump stated earlier this week that he has no intention of dismissing Fed Chair Jerome Powell, alleviating fears of political interference in US monetary policy. The dollar weakened broadly, posting its sharpest declines against the euro, British pound, and Japanese yen.

Dollar Eases as Traders Digest Trade Signals

The South Korean won depreciated below 1,430 per dollar, reversing gains from the previous session after advance estimates for Q1 GDP showed an unexpected contraction. South Korea’s economy shrank 0.2% quarter-on-quarter in Q1 2025, defying expectations of 0.1% growth, while annual GDP fell 0.1%, also missing forecasts of a 0.2% expansion. This comes amid heightened domestic political uncertainty and the impact of sweeping US tariffs. Meanwhile, South Korea and the US were set to hold their first “2+2” trade dialogue later in the day, involving the finance and trade ministers in Washington, seen as a potential step toward easing recently imposed US tariffs. Additionally, US President Trump adopted a softer stance on China tariffs, stating his government aims for "a fair deal with China" and that Beijing may receive a new tariff rate in a few weeks, offering some support for the export-reliant won.

South Korean Won Dips as Q1 GDP Contracts

The Canadian dollar weakened toward $1.39, easing from a six-month high of US$1.38 on April 22nd, as it came under pressure from a resurgent US dollar buoyed by President Trump’s retreat from attacking Fed Chair Jerome Powell and his hints of tariff relief on China. Meanwhile, the IMF’s downgrade of Canada’s 2025 GDP forecast to 1.4% has reignited concerns over domestic demand, capping the loonie’s upside, while the Bank of Canada’s decision to hold its benchmark rate at 2.75% reflected caution amid an unclear US tariff outlook that could either sustain steady growth with inflation near 2% or, if tariffs intensify, risk recessionary pressures and higher inflation.

Canadian Dollar Eases from 6-Month High

The South African rand dipped slightly, crossing 18.6 per USD, amid a stronger dollar and growing expectations of monetary policy easing. Traders raised their positions on the likelihood that the South African Reserve Bank will resume its rate-cutting cycle next month, after inflation fell to a near five-month low of 2.7% in March, dipping below the lower bound of the SARB’s 3-6% target range. The rand has experienced strong volatility in recent months, driven by both external pressures and domestic uncertainty. In particular, political divisions within the governing coalition over a planned VAT hike scheduled for May 1st, continue to weigh on investor confidence.

South African Rand Edges Lower

The Brazilian real strengthened past 5.7 per USD in late-April, its strongest level in nearly three weeks—after President Trump’s assurance that he would not remove Federal Reserve Chair Jerome Powell and his signal of a substantial rollback in China tariffs removed a major external overhang. Simultaneously, robust commodity export flows bolstered Brazil’s external position. China’s reported 90% reduction in US crude imports redirected seaborne oil and soy shipments to Brazilian producers, while iron ore prices climbed on revived Chinese demand, improving Brazil’s terms of trade. On the domestic front, Vice President Geraldo Alckmin’s call for parallel engagement with Washington and Beijing reassured exporters, and renewed momentum on the long-stalled Mercosur-EU trade agreement, reinforced confidence in Brazil’s macroeconomic framework, providing further support for the currency.

Brazilian Real Strengthens for 2nd Session

The Swiss franc weakened almost 1% to near 0.83 per USD, its lowest since April 9, as traders rushed back into the dollar, encouraged by easing concerns about the Federal Reserve’s independence and increasing optimism over US-China trade talks. This decline followed a strong rally that took the franc to its highest level in over a decade on April 21, driven by its status as a safe-haven asset amidst ongoing global trade uncertainty and erratic policy decisions from President Trump’s administration.

Swiss Franc Slips to 2-Week Low

The euro traded around $1.14, just below the $1.15 peak reached earlier this month, its highest level since 2021, as concerns over the Federal Reserve’s independence eased slightly. The dollar recovered some ground after President Trump stated he has no intention of dismissing Fed Chair Jerome Powell. Still, the euro has climbed over 5% against the dollar so far in April, as investors increasingly question the dollar’s dominance in the global financial system and turn to the common currency as an alternative. Additional support came from expectations of increased defense spending, particularly in Germany. On the policy front, the ECB cut its deposit rate by 25bps to 2.25% as anticipated, the lowest since early 2023. The central bank also removed language referring to its policy stance as “restrictive,” while warning that the economic outlook has worsened due to escalating trade tensions. Markets are now betting on two or three more 25bps rate cuts by the end of the year.

Euro Eases Below $1.15

The dollar index rose above 99 on Wednesday, building on a 0.7% gain from the previous session, as concerns over the Federal Reserve’s independence eased and hopes for a de-escalation in the trade war grew. President Trump stated he has no intention of dismissing Fed Chair Jerome Powell, alleviating fears of political interference in US monetary policy. He also signaled a softer stance toward China, saying he plans to be “very nice” in any trade negotiations. Meanwhile, Treasury Secretary Scott Bessent acknowledged that the tariff standoff with China is unsustainable and stressed the need for both sides to de-escalate soon. Despite the recent rebound, the dollar remains down about 9% year-to-date and has lost much of its safe-haven appeal in recent weeks amid persistent trade tensions, recession risks, and political pressure on the Fed, prompting many investors to shift away from US assets.

Dollar Gains for 2nd Day

The offshore yuan steadied around 7.30 per dollar on Wednesday amid signs of a potential easing in US-China trade tensions. During a White House news conference, US President Trump indicated that the 145% tariff on Chinese goods "will come down substantially, but it won't be zero." His comments followed remarks from US Treasury Secretary Bessent, who expressed optimism about de-escalating the trade war between the world’s two largest economies, though he cautioned that negotiations with China would be a long and challenging process. Previously, Trump announced a 90-day pause on planned tariff hikes for most countries but raised tariffs on Chinese goods to 145%, prompting Beijing to retaliate with 125% tariffs on US goods. In China, the central bank urged state-owned enterprises to prioritize using the yuan for payments and settlements in their overseas operations, a move seen as part of a broader push to accelerate the currency’s internationalization amid rising global trade tensions.

Offshore Yuan Steady Amid Trade Relief Hopes

The New Zealand dollar rose to around $0.597 on Wednesday amid hopes of a de-escalation in the U.S.-China trade war after President Donald Trump said he would negotiate with China. On Tuesday, Trump said he would be "very nice" in talks with China—New Zealand's largest trading partner—and indicated that tariffs on Chinese imports could be significantly reduced following a deal, albeit not to zero. The Kiwi dollar also drew support from broad U.S. dollar weakness. Domestically, however, expectations of further monetary easing from the Reserve Bank of New Zealand remain a headwind for the currency. Markets are firmly pricing in a 25bps rate cut in May, with rates seen falling to 2.75% by year-end.

Kiwi Dollar Gains on Hopes for US-China Trade Deal

The South Korean won stabilized around 1,430 per dollar, amid hopes of easing US-China trade tensions. This came after US Treasury Secretary Scott Bessent said he expected the trade war with China to de-escalate and a deal to be reached, while US President Trump hinted that final tariffs on Chinese goods would be well below 145%. Trump also confirmed he has no plans to remove Fed Chair Jerome Powell, helping ease concerns about the central bank independence. Domestically, investors digested latest data showing South Korea’s consumer sentiment edged up to 93.8 in April, as political uncertainty eased after President Yoon’s ousting. Meanwhile, South Korea's Finance Minister Choi Sang-mok arrived in Washington on Tuesday for high-level trade talks aimed at minimizing the impact of the Trump administration’s new tariffs. Traders now await preliminary GDP Q1 figures due tomorrow.

South Korean Won Stabilizes

The Japanese yen traded around 142 per dollar on Wednesday after losing over 1% in the previous session, weighed down by a rebound in the dollar amid signs of easing US-China trade tensions and easing concerns about the Federal Reserve’s independence. On Tuesday, US Treasury Secretary Scott Bessent said the current tariff standoff with China is “unsustainable,” fueling hopes of a de-escalation in trade disputes. While he noted that formal negotiations had not yet begun and warned that talks would likely be a “slog,” his remarks lifted market sentiment. Later in the day, President Donald Trump added to investor confidence by stating he has no intention to remove Federal Reserve Chair Jerome Powell, reducing uncertainty over US monetary policy direction. In Japan, fresh data added a domestic boost, showing private sector activity returned to growth in April after a contraction in March. The recovery was led by a robust expansion in the services sector.

Yen Loses Ground as Haven Demand Eases

The Australian dollar climbed to around $0.64 on Wednesday, rebounding from the previous session’s losses as signs of easing US-China trade tensions lifted market sentiment. US Treasury Secretary Scott Bessent on Tuesday signaled that the current US-China tariff standoff is “unsustainable,” raising hopes of a potential de-escalation. While he cautioned that formal negotiations had not yet begun and warned the process would likely be a “slog,” the remarks helped improve market sentiment. President Donald Trump further reassured investors later in the day by stating he has no plans to remove Federal Reserve Chair Jerome Powell, easing fears around central bank independence. Domestically, the Australian dollar was also supported by upbeat economic data. April figures showed private sector activity expanded for the seventh consecutive month, driven by strong gains in both manufacturing and services sectors.

Australian Dollar Gains on Risk-On Mood

The dollar index held around 99.5 on Wednesday after surging more than 1% in the previous session, underpinned by hopes of de-escalation in the US-China trade war and easing concerns about the Federal Reserve’s independence. Treasury Secretary Scott Bessent said Tuesday that the current tariff standoff with China is “unsustainable” and emphasized that the Trump administration is not seeking to decouple the two economies. Later that day, President Trump confirmed he has no plans to remove Fed Chair Jerome Powell, helping to ease investor uncertainty. The White House’s efforts to reassure markets followed a period of volatility driven by escalating trade rhetoric and perceived threats to Fed autonomy. The dollar rebounded across the board, posting its largest gains against the euro, yen, and Swiss franc.

Dollar Rebounds on Trade, Fed Developments

The Brazilian real strengthened past 5.78 per USD in mid-April, its strongest level in nearly three weeks—after the U.S. dollar weakened on President Trump’s renewed criticism of Fed Chair Jerome Powell and rising market expectations for Fed rate cuts, prompting investors to chase higher-yielding alternatives. At the same time, strong commodity export flows have reinforced Brazil’s external position. China’s 90 percent cut in U.S. crude imports has redirected seaborne crude and soy purchases to Brazil’s producers, while a modest rebound in Chinese iron-ore futures—despite India’s steel taxes—has underpinned shipments.At the same time, renewed momentum on the long-stalled Mercosur-EU trade agreement and central bank President Gabriel Galípolo’s reaffirmation of a data-driven approach to taming inflation have reinforced confidence in Brazil’s macroeconomic framework, providing further support for the currency.

Brazilian Real Near 3-Week Highs

The South African rand rose toward 18.6 per USD, its highest since early April, mainly supported by elevated gold prices as Trump's ongoing pressure on Fed Chair Powell added to global risk sentiment. Recent rand volatility reflects not only external pressures but also domestic uncertainty. Political divisions within the governing coalition, particularly over a planned VAT hike scheduled for May 1, continue to weigh on investor confidence. In this context, the South African Reserve Bank (SARB) will likely keep interest rates unchanged at its next meeting on May 29 amid elevated global uncertainty and concerns over the stability of the exchange rate. The SARB’s Monetary Policy Committee (MPC) left the repo rate at 7.50% at its March meeting, following cuts of 25 bps at each of the previous three meetings in September, November and January.

South African Rand at 3-Week High

The British pound climbed above $1.33, its highest level in seven months, mainly driven by a weaker US dollar despite softer UK inflation data. Headline CPI slowed to 2.6% year-on-year, and services inflation eased to 4.7%, reducing pressure on the Bank of England. This prompted traders to slightly raise bets on rate cuts, now pricing in 86 basis points of easing by year-end, with growing odds of a fourth cut in December. The data suggests the BoE may have more room to support the economy as global trade tensions and household costs weigh on growth. Meanwhile, the US dollar index dropped to a three-year low, hurt by market worries over the Fed’s independence and the economic risks from a potential global trade war.

Sterling Holds at 7-Month High

The US Dollar exchange rate decreased below 140 Japanese Yen in the foreign exchange interbank market.

Japanese Yen traded below 140

The offshore yuan depreciated to around 7.31 per dollar on Tuesday, pressured by renewed US–China trade tensions. On Monday, Beijing warned it would retaliate against countries cooperating with the US in ways that undermine China’s interests, further intensifying global trade uncertainty. The warning follows reports that Trump’s administration plans to use tariff negotiations to pressure allies to scale back ties with China. Despite the geopolitical risks, investors are hopeful for additional stimulus measures from Beijing, such as increased bond issuance and expanded government spending, to mitigate the economic impact of US tariffs. Additionally, the yuan found some support as the People’s Bank of China pushed for greater global use by urging state firms to settle trade in yuan and expand cross-border credit. On the monetary policy front, the PBoC has kept lending rates steady after better-than-expected economic data earlier this month, signaling limited room for further easing.

Offshore Yuan Dips as US-China Tensions Rise

The Australian dollar rose above $0.64 on Tuesday, reaching its highest level in over four months as renewed criticism of the Federal Reserve by President Trump eroded investor confidence in US assets. Disappointment over stalled global trade negotiations also weighed on sentiment, with China standing firm against Trump’s tariff demands. On the domestic front, traders are increasingly betting that the Reserve Bank of Australia will cut interest rates at its May meeting. While a 25 basis-point reduction is widely expected, some are pricing in a more aggressive 50 basis-point cut amid mounting fears of a global economic slowdown driven by trade tensions. Market participants are also eyeing Australia’s upcoming PMI data later this week for additional insight into the health of the domestic economy.

Australian Dollar Hits 4-Month High

The New Zealand dollar rose above $0.60 on Tuesday, reaching its highest level since early November last year, driven by US economic uncertainty that dampened investor confidence in US assets. On Monday, President Trump reiterated his criticism of Fed Chair Powell, suggested the possibility of removing him, and warned that the US economy could slow unless interest rates are cut immediately. Domestically, March trade data showed a 19% year-on-year increase in New Zealand’s exports, while imports grew by 12%. These trends contributed to a double trade surplus of $970 million, the largest since the pandemic in 2020. On the monetary policy front, markets fully expect the Reserve Bank of New Zealand to cut its 3.5% cash rate by 25 bps in May, with a further reduction to 2.75% by year-end.

Kiwi Dollar Climbs to Over 5-Month High

The Japanese yen climbed to around 140.5 per dollar on Tuesday, hovering at a seven-month high as investors sought safety amid global trade tensions and growing skepticism toward US assets. Market sentiment was dampened by stalled trade talks, with China refusing to yield to President Trump’s aggressive tariff policies. Confidence in the US outlook also took a hit after Trump threatened to remove Fed Chair Jerome Powell over delays in rate cuts. Domestically, attention turns to next week’s Bank of Japan policy meeting. While the central bank is widely expected to maintain its benchmark rate at 0.5%, it may lower its economic growth forecasts in light of rising external risks, particularly the impact of US-led tariffs on Japan’s export-heavy economy.

Yen Supported by Safe-Haven Demand

The South Korean won weakened to around 1,425 per dollar, pressured ahead of upcoming South Korea–U.S. trade talks. While reports signaled potential progress, intensifying U.S.–China trade tensions weighed on the export-reliant won, as China vowed to retaliate against countries siding with the U.S. at Beijing’s expense. Finance Minister Choi Sang-mok has departed for Washington, with Industry Minister Ahn Duk-geun set to follow on Wednesday for U.S.-requested talks on April 24. The discussions aim to ease the 25% reciprocal tariff imposed by President Trump, currently under a 90-day suspension. Meanwhile, South Korea’s producer inflation slowed to a four-month low of 1.3% in March from 1.5% in February, reinforcing expectations of further monetary easing by the Bank of Korea. Adding to the pressure, South Korea’s economy is projected to have grown by just 0.1% in the first quarter of 2025, undermining confidence in the currency ahead of preliminary GDP data due Thursday.

South Korean Won Slips Ahead of US Trade Talks

The dollar index traded around 98.4 on Tuesday after hitting a fresh three-year low in the previous session, as concerns about the Federal Reserve’s independence and the potential economic fallout of the global trade war pressured the currency. President Donald Trump said that the Fed should cut interest rates immediately to avoid an economic slowdown, taking aim at Chair Jerome Powell  who wants to wait for the impact of tariffs on inflation. The White House floated the possibility of removing Powell, fueling worries over the politicization of US monetary policy which could undermine the Fed’s credibility and sap investor confidence in the dollar. Meanwhile, markets were disappointed by the lack of progress in trade talks, with China accusing the US of abusing tariffs and warning other countries against striking a deal with Washington at its expense. The dollar has dropped nearly 6% this month, with the sharpest losses recorded against the euro, yen, and Swiss franc.

Dollar Languishes at 3-Year Low

The Mexican peso strengthened toward 19.6 per dollar, a near six-month high, supported by broad-based weakness in the USD compounded by Banxico’s relatively high interest rates. President Trump’s sharp criticism of the Fed and demands for immediate rate cuts have undermined confidence in the Fed’s independence and cast a shadow on the safe-haven status of U.S. assets. Meanwhile, Mexico’s comparatively tight monetary stance—Banxico’s 11% policy rate versus roughly 4% core inflation—continues to attract significant carry-trade inflows. The peso’s advance was further reinforced by the “very productive” call between Presidents Trump and Sheinbaum, which allayed fears of sweeping new tariffs on steel, autos, and tomatoes, and by stable oil export revenues that continue to bolster Mexico’s trade receipts.

Mexican Peso Near 6-Month High

The Canadian dollar strengthened past $1.38 in April, marking a six -month high, as investors digested the Bank of Canada's recent policy decision, combined with a weakening U.S. dollar. The Bank of Canada maintained its benchmark rate at 2.75%, citing an unclear U.S. tariff outlook that could either support steady growth with inflation near 2% or, if tariffs intensify, trigger a recession and higher inflation. Additionally, China’s 90% cut in U.S. oil imports has redirected over a quarter of its seaborne demand to Canadian barrels via the new Alberta–Vancouver pipeline, underpinning export revenues. At the same time, the U.S. dollar slumped to its weakest since February 2022 amid fears that political attacks on the Fed—most notably President Trump’s demand for an immediate rate cut and Kevin Hassett’s suggestion that Chair Powell be removed—have politicized monetary policy, eroding confidence in the greenback and Treasury bonds as safe havens.

Canadian Dollar Hits 6-Month High

The Russian ruble was at 82 per USD in April, hovering around its strongest in nearly two years, supported by the sharp decline in the dollar, capital controls, and high interest rates by the central bank. Concerns of shocks to global capital flows stemmed by US tariffs and retaliatory measures by other economies triggered outflows from the US and riskier emerging markets, but capital controls in place by Moscow prevented domestic investors from pivoting out of ruble-denominated assets. Also, the relative stability in future Russian trade due to its lack of economic ties in the West also limited the urgency of a capital flight. Consequently, the currency appreciated despite the sharp decline in prices of energy and key metals that Russia exports and the Kremlin depends on for its budget revenues. In the meantime, the Central Bank of Russia held its policy rate at 21% in its last meeting, as expected, and stuck a more optimistic tone on disinflation.

Russian Ruble Hovers at 2-Year High

The Indian rupee strengthened to 85 per USD in April, the highest in four months, 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 Strengthens to 4-Month High

The Swiss franc appreciated toward 0.80 per dollar in April, extending the month's rally to its strongest in over a decade, as increasing uncertainty in US economic policy pressured the greenback and favored the franc as the global safe-haven currency. The latest wave of inflows to Swiss markets was after the US Trump administration backed their threats that Fed Chair Powell might be dismissed by the President for not cutting interest rates, jeopardizing the central bank's independence. This magnified the franc's earlier rally after Trump's aggressive reciprocal tariff package drove investors to favor real foreign money and gold instead of dollar securities. The strengthening of the franc against the euro stoked speculation that the SNB may intervene in currency markets or retest negative interest rates.

Swiss Franc Strengthens to Over 10-Year High

The euro rallied about 1.5% to $1.15, its strongest level since November 2021, fueled by broad dollar weakness amid growing concerns over the Fed’s independence. The shift followed remarks from President Trump and US National Economic Council Director, suggesting Trump is still “studying” whether to dismiss Fed Chair Powell. The euro has climbed over 5% against the dollar so far in April, as investors increasingly question the dollar’s dominance in the global financial system and turn to the common currency as an alternative. Additional support came from expectations of increased defense spending, particularly in Germany. On the policy front, the ECB cut its deposit rate by 25bps to 2.25% as anticipated, the lowest since early 2023. The central bank also removed language referring to its policy stance as “restrictive,” while warning that the economic outlook has worsened due to escalating trade tensions. Markets are now pricing in three more 25bps rate cuts by the end of the year.

Euro at 2021-Highs

The dollar index fell to 98.2 on Monday, the lowest since February 2022, as concerns over the Federal Reserve's independence weighed on the greenback. On Friday, National Economic Council Director Kevin Hassett revealed that President Trump is exploring the possibility of firing Fed Chair Jerome Powell. A day earlier, Trump posted on social media that Powell’s removal “cannot come fast enough,” while intensifying pressure on the central bank to cut interest rates. Such remarks have fueled worries about the politicization of US monetary policy, potentially undermining the Fed’s credibility and shaking investor confidence in the dollar. The timing is particularly sensitive, as US assets, including the dollar and Treasury bonds, are already under pressure and increasingly seen as less reliable safe havens due to mounting uncertainty over the administration’s policies. So far in April, the greenback has lost roughly 4.6%, with its steepest declines against the euro, yen, and Swiss franc.

Dollar Slumps as Trump Administration Ramps Up Pressure on Fed

The British Pound rose past $1.33, the highest in seven months, largely due to a weaker US dollar, even after lower-than-expected CPI data. Inflation cooled more than expected, with the headline CPI falling to 2.6% year-on-year and services inflation dipping to 4.7%, easing pressure on the Bank of England. This has led traders to slightly increase bets on rate cuts, now pricing in 86 basis points of easing by year-end. Markets now see a better-than-even chance of a fourth rate cut in December, as slower price growth may give the BoE room to support the economy amid global trade uncertainty and rising household costs.

Sterling Climbs to 7-Month High

The New Zealand Dollar exchange rate rose above 0.6 US Dollars in the foreign exchange interbank market.

New Zealand Dollar traded above 0.6

USDINR decreased to a 17-week low of 84.99. Over the past 4 weeks, US Dollar Indian Rupee lost 0.58%, and in the last 12 months, it increased 1.96%.

Indian Rupee Hits 17-week High

The Australian dollar climbed to around $0.64 on Monday, approaching a four-month high as broad weakness in the US dollar continued to support commodity-linked currencies. The greenback came under pressure amid concerns over the US Federal Reserve’s independence, following reports that the White House is exploring the potential removal of Fed Chair Jerome Powell. President Donald Trump has expressed frustration over the Fed’s reluctance to cut interest rates. On the domestic front, the Reserve Bank of Australia is widely expected to lower interest rates by 25 basis points at its upcoming May meeting. Some market participants are even pricing in a larger, 50 basis-point cut, as fears of a global economic slowdown intensify in light of escalating trade tensions. Investors will also be watching Australia’s PMI data due later this week for further clues on the economy’s health. Meanwhile, trading volumes are likely to remain muted as local markets remain closed for Easter Monday.

Australian Dollar Strengthens on Weaker Greenback

The offshore yuan rose to around 7.28 per dollar on Monday, rebounding from losses seen the previous week after the People's Bank of China expectedly kept its benchmark lending rates unchanged for the sixth consecutive month in April 2025. The one-year loan prime rate was held steady at 3.1%, while the five-year LPR remained at 3.6%. The move signals the central bank's continued focus on stabilizing the yuan in the face of growing trade tensions with the US. Meanwhile, the Chinese government significantly increased its budget spending to CNY 9.26 trillion in the first three months of 2025, aiming to boost domestic demand and buffer the economy against mounting challenges, including escalating US tariffs, deflationary pressures, and a prolonged property slump. Externally, the yuan also found support from a depreciating US dollar amid President Donald Trump's renewed threats against Fed Chair Jerome Powell and pressure on the central bank to cut interest rates.

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