GBPUSD increased to a 28-week high of 1.33. Over the past 4 weeks, British Pound US Dollar gained 2.17%, and in the last 12 months, it increased 7.41%.

British Pound Hits 28-week High

Japan does not engage in actions to deliberately weaken the yen, Finance Minister Katsunobu Kato told parliament on Friday, pushing back against U.S. President Donald Trump’s claims that Tokyo intentionally drives down its currency to support exporters. His comments come ahead of a possible meeting with U.S. Treasury Secretary Scott Bessent in Washington next week during the G20 finance summit and IMF spring meetings. If held, the talks would serve as the main forum for Japan and the U.S. to address currency issues amid broader tariff negotiations launched earlier this week. Kato pointed out that Japan’s most recent intervention in the currency market involved buying yen, not selling it, which reflects Tokyo’s commitment to fair market operations. While he acknowledged that the U.S. is keen to raise the topic of exchange rates, Kato declined to speculate on potential discussion points and noted that no date has been set yet for the meeting with Bessent.

Japan Denies Yen Manipulation Claims

The offshore yuan traded around 7.30 per dollar on Friday, holding in a tepid session as investors weighed ongoing uncertainty in Sino-US trade relations. Late Thursday, President Trump struck an optimistic tone, suggesting a trade deal with China could be finalized within three to four weeks. This followed Beijing’s move earlier in the week to outline its conditions for resuming talks, calling for greater respect, policy consistency, and a clearly designated US negotiator with full backing from Trump. Meanwhile, recent data showed China’s Q1 GDP grew more than expected—the strongest pace in over a year. March industrial output and retail sales also exceeded forecasts, while the unemployment rate edged lower, indicating that ongoing policy stimulus is supporting the economy. For the week, the yuan is on track for modest losses.

Offshore Yuan Remains Tepid

The Australian dollar edged lower to around $0.637 on Friday, breaking a seven-day winning streak in thin trading as local markets were shut for the Good Friday holiday. The pullback followed weaker-than-expected domestic jobs data earlier in the week, which reinforced expectations of further monetary easing by the Reserve Bank of Australia. While the unemployment rate held steady at a low 4.1% in March, employment growth fell short of forecasts, prompting speculation that the RBA could cut interest rates by 25 basis points at its next meeting in May. Some market participants are even pricing in a possible 50 basis point cut, citing rising concerns over a global slowdown driven by escalating tariffs. Traders also kept a close eye on international developments, as the US held trade talks with key partners. President Trump also signaled a potential thaw in tensions with China, stating he does not want tariffs to increase further and may consider lowering them in the future.

Australian Dollar Slips Amid Holiday Lull

The Japanese yen held steady around 142.3 per dollar on Friday, hovering near seven-month highs as investors digested the latest inflation data. Official figures showed headline inflation in Japan eased to a four-month low of 3.6% in March, while core inflation rose in line with expectations to 3.2%. The market’s focus now shifts to the Bank of Japan’s policy meeting next week, where the central bank is widely expected to keep interest rates unchanged at 0.5%. However, policymakers may revise their growth projections downward amid growing concerns over the impact of US tariffs on Japan’s export-reliant economy. Although the BOJ is expected to maintain a gradual tightening path this year, driven by persistently high food prices and rising wages, the external trade environment continues to cast uncertainty over its monetary stance. Meanwhile, Japanese Finance Minister Kato addressed currency concerns, stating that Japan is not manipulating the foreign exchange market to weaken the yen.

Japanese Yen Muted After Inflation Data

The New Zealand dollar held steady around $0.597 on Friday, pausing a seven-day winning streak, as expectations of further easing by the Reserve Bank of New Zealand sapped the momentum. This came despite stronger-than-expected consumer inflation data in Q1, while core inflation measures eased. With price pressures contained and still within the RBNZ’s target range, markets continue to anticipate a rate cut in May and a reduction of the cash rate to 2.75% by year-end. Meanwhile, investors are closely monitoring US trade policy developments, given New Zealand’s strong export ties—especially with China, its largest trading partner. President Trump expressed confidence on Thursday that a trade deal with China could be finalized within three to four weeks. The Kiwi is on track for its second consecutive weekly gain.

New Zealand Dollar Pauses Rally

The US dollar held steady against major currencies on Friday, as trading activity remained subdued with most global markets closed for the Good Friday holiday. Low volumes capped movement, keeping the greenback near 3-year lows. The dollar has come under pressure amid concerns about the economic fallout from tariffs and increasing policy uncertainty under Trump. However, market sentiment showed signs of stabilization as the US held trade talks with key partners including Japan and Italy. President Trump also indicated a possible de-escalation of trade tensions with China, stating he does not want tariffs to rise further and may even consider reducing them at some point. Meanwhile, Trump criticized Fed Chair Powell of being too slow to cut rates and suggesting his removal "can’t come quickly enough." On Wednesday, Powell said the Fed is cautiously monitoring the impact of tariffs before acting. On the economic front, jobless claims fell to a 2-month low amid a strong labor market.

Dollar Holds Steady in Thin Holiday Trade

The South Korean won extended its recent decline to around 1,422 per dollar on Friday, weighed down by expectations of further easing from the Bank of Korea. The central bank held rates steady as expected on Thursday but signaled a rate cut next month to address economic risks from US tariff policies. South Korea's GDP growth projection has been revised downward to below the previous 1.5% estimate, while inflation is expected to remain near 2%. Meanwhile, investors continued to monitor developments in US–South Korea trade negotiations. Although reports indicated promising progress, ongoing trade tensions between the US and China may add pressure on the won, given South Korea’s export-driven economy and its sensitivity to global trade dynamics. For the week, the currency is on track for modest gains.

South Korean Won Extends Losses

The US dollar index eased gains to 99.4 after mixed signals from economic data and renewed political pressure on the Fed. Jobless claims fell to a two-month low, suggesting a still-solid labor market. However, the Philadelphia Fed Index dropped sharply, missing all forecasts and highlighting weakness in manufacturing. President Trump lashed out at Fed Chair Powell, accusing him of being too slow to cut rates and saying his removal “can’t come quickly enough.” On Wednesday, Powell maintained a cautious stance, saying the Fed is monitoring the impact of tariffs before acting. Meanwhile, the ECB cut rates for the seventh time since last June amid rising global trade tensions, which continue to weigh on market sentiment. Attention is now shifting to individual trade negotiations, especially with China, after Beijing set conditions for entering new talks with the US.

DXY Pares Gains

The Euro weakened to approach $1.13, slightly retreating from January-2022 highs, after the ECB lowered borrowing costs for a sixth straight time as expected. The central bank cut the key deposit rate by 25bps to 2.25%, the lowest level since early 2023, and dropped a reference to 'restrictive' policy. Still, the euro has gained roughly 5% against the greenback so far in April, as investors reassess the dollar’s role in the global financial system and increasingly view the common currency as a viable alternative. In addition, expectations of higher defense spending, particularly in Germany, have added upward momentum to the euro.

Euro Weakens After ECB

The Turkish lira hovered near a record low of 38 per US dollar in April, as traders continued to weigh the country’s political and economic outlook. In a surprise move at its April meeting, the central bank raised the benchmark one-week repo rate to 46% from 42.5% in an effort to restore investor confidence. This followed an emergency rate hike in March, when the central bank raised the overnight lending rate to stabilize the currency after a sharp sell-off triggered by the arrest of Ekrem Imamoglu, President Erdogan’s main political rival, which sparked the largest protests in over a decade. Meanwhile, inflation in Turkey slowed for the tenth consecutive month, easing to 38.10% in March, its lowest level since December 2021 and below market expectations of 38.90%.

Turkish Lira Hovers Near Record Lows

The euro hovered around $1.14, near its highest level since January 2022, supported by broad-based dollar weakness as traders pull back from US assets amid uncertainty over trade policy. The euro has gained roughly 5% against the greenback so far in April, as investors reassess the dollar’s role in the global financial system and increasingly view the common currency as a viable alternative. In addition, expectations of higher defense spending, particularly in Germany, have added upward momentum to the euro. On the monetary policy front, the European Central Bank is expected to deliver its seventh rate cut since June, lowering the key deposit rate to 2.25% from 2.5%. Markets anticipate at least two more cuts by year-end, as the stronger euro helps curb inflationary pressures.

Euro Close to 3-Year Highs Ahead of ECB

The New Zealand dollar slipped to around $0.591 on Thursday, snapping a six-day winning streak as higher-than-expected consumer inflation data failed to shift market expectations of further monetary easing. New Zealand's annual inflation rate rose to 2.5% in the first quarter, slightly above market forecasts of 2.3%, from 2.2% in the previous quarter. Despite the increase, the number is comfortably within the Reserve Bank of New Zealand’s 1–3% target range for a third consecutive quarter, reinforcing the view that it won’t prevent additional rate cuts. Markets remain fully priced for another 25bps rate at the RBNZ’s next policy meeting in May, with rates seen potentially bottoming at 2.75% by year-end. The currency also faced pressure from a stronger U.S. dollar after Federal Reserve Chair Jerome Powell said the Fed would wait for more data on the economy's direction before making any changes to interest rates.

NZ Dollar Falls Despite Strong CPI Data

The offshore yuan fell to around 7.31 per dollar on Thursday, reversing gains from the previous session as investor caution resurfaced amid renewed concerns over US-China trade relations. The White House released a fact sheet emphasizing that some items faced a combined tariff of up to 245%, primarily in response to China’s decision to raise its own tariffs on US imports to as high as 125% as part of its retaliatory actions. In response, China’s Foreign Ministry dismissed the move, stating that Beijing “will pay no attention to the US tariff numbers game.” Despite escalating tensions, there are still glimmers of hope for progress. Reports suggest that China remains open to trade talks, provided that the US abandons its aggressive tactics. Beijing has urged Washington to end its campaign of extreme pressure, threats, and blackmail, and instead engage in dialogue based on equality, mutual respect, and shared benefit.

Offshore Yuan Falls on Tariff Uncertainty

The Japanese yen weakened past 142 per dollar on Thursday, pulling back from multi-month highs as the US dollar regained strength following hawkish remarks from Federal Reserve Chair Jerome Powell. Powell signaled that the Fed is in no rush to lower interest rates, citing uncertainties around trade policy and warning that tariffs could drive inflation higher and slow economic growth. On the domestic front, data showed that Japan’s export growth fell short of expectations in March, dragged down by weaker shipments to China and the EU. Still, a rebound in import growth hinted at underlying resilience in domestic demand. Meanwhile, Japan’s Economy Minister Ryosei Akazawa said that foreign exchange was not discussed during ongoing trade talks in Washington. Japan continues to push for the complete removal of Trump's tariffs, including a 10% base tariff and an additional 25% levy on car exports.

Japanese Yen Eases as Dollar Rebounds

The Australian dollar slipped to around $0.635 on Thursday, breaking a six-day winning streak, as weaker-than-expected employment data fueled expectations of further monetary easing by the Reserve Bank of Australia. While the unemployment rate stayed low at 4.1%, March employment growth came in below forecasts. This reinforced bets that the RBA would cut interest rates by 25 basis points in May, with some even pricing in a possible 50 basis point move amid growing concerns over a tariff-driven global slowdown. The Aussie also came under renewed pressure from a strengthening US dollar, after Fed Chair Jerome Powell signaled that the Federal Reserve is in no hurry to cut rates, citing lingering uncertainties around trade policy. Powell also warned that tariffs could stoke inflation and weigh on growth, further complicating the Fed’s dual mandate.

Australian Dollar Dips on Soft Jobs Data

The South Korean won declined to around 1,420 per dollar on Thursday, reversing gains from the previous session as the US dollar strengthened following remarks from the Federal Reserve. On Wednesday, Fed Chair Jerome Powell indicated that the Fed is in no hurry to cut interest rates, while emphasizing that tariffs could stoke inflation and dampen economic growth. In South Korea, the central bank kept its base rate steady at 2.75% during its April 2025 meeting, in line with expectations. The rate remains at its lowest level since September 2022, as the Bank of Korea continues its efforts to stabilize inflation, support sluggish economic growth, and mitigate risks from global economic uncertainties, while also navigating the political landscape ahead of the country's upcoming presidential election on June 3, 2025.

South Korean Won Declines on Stronger Dollar

The US dollar index climbed above 99.5 on Thursday, recovering some losses from the previous session as investors continued to assess the outlook for Federal Reserve monetary policy in light of shifting trade policies. In a speech on Wednesday, Fed Chair Jerome Powell warned that tariffs could fuel inflation and slow growth, complicating the Fed’s dual mandate of price stability and maximum employment. Powell also signaled that the Fed is in no rush to cut interest rates, citing the need for more clarity before making any policy moves. Meanwhile, investors awaited signs of potential trade negotiations between the US and China, with Beijing reportedly open to talks under certain conditions. On the economic front, US retail sales surged in March, marking the strongest growth in over two years and highlighting continued consumer resilience despite broader economic uncertainties.

Dollar Strengthens as Fed Signals Patience

The dollar index dropped below the 99.3 mark on Wednesday, extending its monthly decline to a three-year low, as investors reacted to Federal Reserve Chair Jerome Powell's remarks highlighting the economic risks posed by President Trump's tariffs. Powell cautioned that the tariffs are likely to lead to higher inflation and slower growth, complicating the Fed's dual mandate of price stability and full employment. He emphasized a cautious approach, stating that the central bank would wait for greater clarity before making any adjustments to interest rates. This dovish stance contributed to the dollar's decline, as traders anticipated a prolonged period of policy uncertainty. This comes on the top of ongoing threats on copper, pharmaceuticals, lumber, and semiconductors, ramping up concerns of an incoming recession and triggering outflows to foreign markets that pressured the dollar, US equities, and US Treasury securities simultaneously.

Dollar Weakens on Powell’s Caution, Trade Tensions

The Mexican peso strengthened past 20 per dollar, rebounding further from the lowest since March 2022 of 20.85 on April 8th, driven primarily by broad-based US dollar weakness. Signs of moderating inflation in the US have fueled expectations of forthcoming rate cuts by the Federal Reserve, weighing on dollar yields, while Mexico’s comparatively tight monetary policy, with Banxico maintaining real interest rates well above inflation, continues to attract carry trade inflows and support currency stability. Although short-term volatility persists amid shifting US tariff rhetoric—particularly regarding key exports like tomatoes—investors appear less concerned about sweeping trade disruptions following signals from Trump’s camp suggesting possible exemptions for sectors like semiconductors and electronics. Meanwhile, ongoing negotiations led by President Sheinbaum underscore a strategic push to protect Mexico’s trade access and reassure markets, tempered fears of a broader trade fallout.

Mexican Peso Rebounds Past 20 USD

The Brazilian real stabilized around 5.9 per USD in mid-April, supported by broad-based U.S. dollar weakness as markets increasingly priced in a dovish shift from the Federal Reserve. Signs of moderating U.S. inflation have raised expectations of rate cuts later this year, pressuring the dollar and boosting demand for higher-yielding emerging market currencies such as the real. Concurrently, Brazil is seizing an opportunity to advance the long-delayed Mercosur-EU trade agreement amid shifting global trade dynamics triggered by Donald Trump’s tariff rhetoric, which has pushed the EU to reassess its commercial strategy. The prospect of expanded market access and closer alignment with the EU has strengthened investor confidence in Brazil’s export potential and broader growth trajectory. Meanwhile, Brazil’s relatively high real interest rates continue to attract carry trade inflows, especially as easing cycles in advanced economies narrow global yield differentials.

Brazilian Real Steady Around 5.9 per USD

AUDUSD increased to a 7-week high of 0.64. Over the past 4 weeks, Australian Dollar US Dollar gained 0.08%, and in the last 12 months, it decreased 0.78%.

Australian Dollar Hits 7-week High

The Canadian dollar strengthened past $1.39, close to its five-month high of $1.387 recorded on April 11th, as investors digested the Bank of Canada's recent policy decision, combined with a weakening U.S. dollar driven by escalating trade uncertainties. The Bank of Canada maintained its benchmark rate at 2.75%,  its first pause after cumulative cuts of 2.25 percentage points over seven meetings, 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. This cautious stance has cemented expectations of a stable monetary framework for Canada, bolstering the CAD, while the US dollar falters under the weight of potential new tariffs on critical minerals add further uncertainty to the U.S. growth outlook.

Canadian Dollar Near 5-Month Highs

The dollar index held session losses at the 99.6 mark on Wednesday, resuming its slide to the lowest in three years as more trade barriers by President Trump pressured the US growth outlook. The President launched a probe to tax critical minerals, escalating the trade war with China shortly after concessions on autos and electronics had halted the selloff in dollar-denominated assets. Besides potential tariffs on critical minerals was added to ongoing threats on copper, pharmaceuticals, lumber, and semiconductors. The unpredictability of trade relationships ramped up concerns of an incoming recession, triggering outflows to foreign markets that pressured the dollar, US equities, and US Treasury securities simultaneously. On the data front, retail sales soared in March as households expedited car purchases before aggressive tariffs on the sector. The pressure on the dollar prevailed despite soft inflation readings from Canada, the Eurozone, and the UK.

Dollar Index Holds Losses at 3-Year Low

The Swiss franc appreciated nearly 1% to around 0.816 per USD, holding close to 2011-highs, as the dollar weakened amid renewed U.S.-China trade tensions, stoking fears of a global recession. Since the April 2 tariff announcement, the franc has surged over 7%, making it one of the top-performing major currencies. The ongoing strength of the currency and the resulting deflationary pressures have raised expectations that the Swiss National Bank may consider reintroducing negative interest rates.

Swiss Franc Strengthens

The South African rand traded around 18.9 per USD, its highest level since early April, as the dollar faltered amid renewed concerns over U.S. tariffs and a potential economic slowdown. Meanwhile, in its latest Monetary Policy Review, the South African Reserve Bank cautioned that borrowing costs around the world are likely to remain higher for longer as doubts about the inflation outlook grow. The central bank stressed that the shocking tariffs implemented by US President Donald Trump could slam the domestic economy if they came into full effect. Governor Lesetja has warned that, should its worst-case scenario play out, the GDP could shrink by 0.69% instead of the gain of 1.7% it hopes for. Meanwhile, local investors continued to monitor news about the future of South Africa's government.

South African Rand Firmer

The Indian rupee strengthened to 85.6 per USD, reapproaching the three-month high of 85.3 touched on April 3rd as broad weakness in the dollar halted large banks' previous trend of selling rupees at allowed amounts. 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 Extends Stronger Momentum

The dollar index fell to the 99.5 mark on Wednesday, resuming its slide this month to the lowest in three years as aggressive tariffs by President Trump pressured the outlook on US growth. The President launched a probe into placing tariffs on critical minerals, potentially escalating the trade war with China shortly after concessions on autos and electronics had halted the selloff in dollar-denominated assets. Besides potential tariffs on critical minerals, the White House also maintained tariff threats on copper, pharmaceuticals, and semiconductors. The unpredictability of trade relationships between the US and major economic partners ramped up concerns of an incoming recession among major business leaders and market players, triggering outflows to foreign markets that pressured the dollar, US equities, and US Treasury securities simultaneously. The pressure on the dollar prevailed despite soft inflation readings from Canada, the Eurozone, and the UK.

Dollar Index Slides to 3-Year Low

The offshore yuan rose to around 7.29 per dollar on Wednesday, rebounding from two consecutive sessions of losses, driven by optimism surrounding potential US-China trade talks and stronger-than-expected economic data from China. Beijing signaled its openness to negotiations but emphasized the need for key changes from Washington, including more respectful diplomatic language and the appointment of a clear negotiator with the backing of President Trump. Adding to the momentum, data released on Wednesday showed that China's GDP grew more than expected in the first quarter of 2025, marking its strongest expansion in a year and a half. In addition, industrial output surged in March, recording its fastest growth since June 2021 and easily surpassing market expectations. Retail sales also posted its quickest expansion since December 2023, exceeding market forecasts. On the labor front, the unemployment rate edged lower in March 2025 from the two-year high recorded in the previous month.

Offshore Yuan Rebounds on US-China Trade Talk Hopes, Strong Data

The British pound rose for a seventh straight day to $1.327, boosted by a weaker dollar despite softer UK inflation data, marking its longest winning streak since July. 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 for 7th Straight Session

The Australian dollar held above $0.63 on Wednesday, eyeing a sixth consecutive session of gains as strong economic data out of China lent support to risk sentiment. As China remains Australia’s largest trading partner and a key buyer of its commodities, upbeat Chinese indicators helped buoy the currency despite a cloud of geopolitical uncertainty. However, momentum was tempered by renewed trade tensions as U.S. President Donald Trump ordered a probe into possible new tariffs on all critical mineral imports—many of which the U.S. sources from China—adding to fears of a deepening U.S.-China trade conflict. On the domestic front, traders awaited Thursday’s employment data for further clues on labor market strength and potential implications for Reserve Bank of Australia policy direction.

Australian Dollar Holds Firm

The offshore yuan steadied around 7.32 per dollar on Wednesday, following the release of stronger-than-expected economic data from China. THe country's GDP grew more than expected in the first quarter of 2025, remaining at its strongest expansion in a year and a half. Adding to the upbeat picture, industrial output surged in March, posting its fastest growth since June 2021 and easily beating market expectations. In addition, retail sales recorded its quickest expansion since December 2023 and exceeded market forecasts. On the labor front, the unemployment rate edged lower in March 2025, from a two-year high recorded in the previous month. These positive results were largely underpinned by continued policy stimulus aimed at bolstering the Chinese economy. Despite positive data, escalating US-China trade tensions cloud the outlook. In a recent move, US President Trump launched a probe into new tariffs on key mineral imports, which are heavily sourced from China, sparking fresh concerns.

Offshore Yuan Steady Amid Upbeat Data

The Japanese yen strengthened past143 per dollar on Wednesday, recovering from the previous session’s losses as broad-based weakness in the U.S. dollar persisted. The decline in the greenback was fueled by mounting concerns over the economic fallout from potential new U.S. tariffs. In the latest trade policy twist, President Donald Trump ordered a probe into possible tariffs on all U.S. critical mineral imports, many of which are sourced from China. The move added to investor anxiety, further weighing on the dollar. Meanwhile, attention is shifting to upcoming trade talks between Japan and the U.S., with Tokyo pushing for the full removal of Trump's tariffs. On the domestic front, traders digested data showing an eight-month high in Japanese manufacturing sentiment for April. However, the outlook remains cautious as fears around U.S. trade policy persist.

Yen Strengthens as Dollar Slips on Trade Concerns

The New Zealand dollar rose to around $0.590 on Wednesday, marking its seventh consecutive session of gains and hovering near its highest level since early December 2024. The sustained rally reflects improving global risk sentiment as Trump signaled a possible delay to auto tariffs after suspending levies on some tech products. However, caution remains as the U.S. Commerce Department launched national security probes into semiconductor and pharmaceutical imports, a move that could pave the way for new tariffs. The kiwi also drew support from better-than-expected economic data out of China, New Zealand’s largest trading partner. Domestically, market focus is now on Thursday’s release of first-quarter CPI data, which is expected to show annual inflation edged up to 2.3% from 2.2% in the previous quarter. Last week, the Reserve Bank of New Zealand cut its rates by 25bps to 3.5% and investors are currently pricing in further easing to 2.75% by autumn.

Kiwi Dollar Extends Winning Streak

The U.S. dollar index slipped below the 100 mark on Wednesday, hovering near three-year lows as investors awaited a closely watched speech by Federal Reserve Chair Jerome Powell. Markets are on edge as the Fed faces the delicate task of supporting economic growth while managing the risk of tariff-driven inflation. Adding to the uncertainty, President Donald Trump ordered a new investigation into potential tariffs on all critical mineral imports—many of which the U.S. sources from China. The move further clouded the trade outlook, with no indication yet of renewed talks between Washington and Beijing. The dollar weakened broadly, with the sharpest losses seen against the euro, Australian dollar, and Japanese yen, as traders grew cautious ahead of both Powell’s comments and ongoing trade developments with key U.S. partners.

Dollar Slips Ahead of Powell Speech Amid Trade Uncertainty

The South Korean won held its recent decline around 1,428 per dollar as market sentiment remained cautious ahead of upcoming trade negotiations between the US and key partners, including South Korea. Finance Minister Choi Sang-mok is scheduled to meet with US Treasury Secretary Scott Bessent next week to address trade issues, including the new US import tariffs. Separately, Trade Minister Cheong In-kyo emphasized South Korea’s goal to strengthen cooperation with the US in shipbuilding and energy, using it as a potential bargaining chip during the 90-day grace period. However, concerns persisted as the Trump administration aims to pressure over 70 countries to reduce ties with China and has launched a probe into new tariffs on critical mineral imports, further escalating trade tensions. Meanwhile, the won found some support as South Korea’s import prices fell for the second consecutive month in March, fueling bets that the Bank of Korea may pause its rate-cutting cycle in April.

South Korean Won Pressured Ahead of Trade Talks

?The Argentine peso weakened to around 1,200 per US dollar, following President Javier Milei's abrupt removal of long-standing capital and currency controls. This policy shift, enabled by a new $20 billion loan from the IMF—including an immediate $12 billion disbursement—aims to stabilize the economy by allowing the peso to float within a managed band of 1,000 to 1,400 per USD. While intended to attract foreign investment and boost exports by eliminating market distortions, the sudden transition has introduced volatility. The peso experienced a 10% drop on the first day of the new regime, reflecting market adjustments to the removal of artificial exchange rate supports. Although the IMF loan bolsters central bank reserves, providing a buffer against further depreciation, the currency's stability now hinges on investor confidence in the government's broader economic reforms. The narrowing gap between official and black market exchange rates suggests a move toward normalization.

Argentine Peso Hits Fresh Record Low

The dollar index rose toward the 100 mark on Tuesday, halting the selloff that bottomed at a three-year low of 99.6 yesterday following fresh tariff relief by the US Presidential administration. President Trump signaled that he is looking into tariff exemptions for auto parts shortly after pausing the aggressive retaliatory levies on computers and electronics. The moves signaled that the White House is willing to soften its aggressive tariff exchanges with major trading partners following the adverse reaction from financial markets and business leaders, easing worries that triggered a selloff in a wave of dollar-denominated securities. Still, Trump also threatened to still tariff copper, semiconductors, electronics, and pharmaceuticals in a near futures, withholding uncertainty and maintaining the DXY over 9% down year-to-date.

US Dollar Halts Selloff

The Canadian dollar halted its rally near $1.39, close to its five-month high of $1.387 recorded on April 11th, as dovish expectations for the Bank of Canada and a modest rebound in the US dollar have tempered further gains. Canada's annual inflation rate fell to 2.3% in March, down from 2.6% in February, undercutting both market expectations and the Bank of Canada's forecast of 2.5%, and signaling the beginning of the anticipated normalization following a 0.6 percentage point rise triggered by the end of GST and HST breaks. At the same time, the U.S. dollar’s recent plunge has similarly stalled after President Trump's move to exempt key technology products from reciprocal tariffs and reports of a potential pause in his 25% auto import levies, eased concerns of imminent recession risks. However, caution persists amid a national security investigation by the U.S. Commerce Department into semiconductor and pharmaceutical imports.

Canadian Dollar Halts Rally

The Swiss franc rose toward 0.81 per USD, holding close to its highest level since August 2011, supported by safe-haven demand amid a subdued dollar, as investors sought refuge from persistent market uncertainty driven by President Trump’s shifting trade stance and unpredictable policies. On Monday, Trump suggested he might temporarily exempt the auto industry from previously imposed tariffs, allowing carmakers more time to adjust their supply chains. He also announced temporary exemptions for key tech products—including semiconductors and smartphones—from the latest round of tariffs on Chinese imports. Meanwhile, the franc's ongoing strength has sparked speculation that the central bank may cut interest rates further to prevent deflationary risks, as concerns grow that the currency's rise could lower import costs too much for the SNB’s comfort. The SNB's key rate is now 0.25%, with Swiss inflation at 0.3%, the lower end of its target range.

The pound rose above $1.32, a six-month high, as markets responded to easing trade fears and shifting Bank of England (BoE) expectations. Hopes that Trump might delay auto tariffs helped UK exporters, especially car parts makers reliant on US trade, lifting sentiment for sterling. On the other hand, the BoE is seen as likely to cut rates soon — with markets nearly fully pricing in a rate cut in May — as UK firms shed jobs ahead of tax hikes and higher wage costs. While private-sector wage growth remains high at 5.9%, employment fell sharply in March, hinting at economic weakness. A stronger pound and softer global demand from trade disruptions may ease inflation pressures in the near term, but expected spikes in energy and regulated prices later this year complicate the BoE's path. Investors are betting on faster rate cuts, even as inflation risks remain.

Sterling Strengthens to 6-Month High

The offshore yuan held its recent decline around 7.32 per dollar, reflecting persistent market concerns over rising US-China trade tensions, as Trump advanced new tariff probes while Xi called for unity against trade "bullying." The US is moving forward with investigations into the national security risks of semiconductor and pharmaceutical imports, two sectors heavily reliant on Asian, particularly Chinese, supply chains, which could lead to new tariffs and escalate the trade war. This comes despite recent tariff U-turns, including a pause on reciprocal levies, temporary exemptions for consumer electronics, and reports suggesting a potential pause on the 25% duties on auto imports. Meanwhile, Chinese President Xi Jinping, during the start of his diplomatic tour of Southeast Asia, warned that "no one wins in a trade war," reflecting Beijing's efforts to counter US pressure by strengthening ties with ASEAN nations.

Offshore Yuan Pressured by US Tariff Moves

The Australian dollar climbed toward $0.635 on Tuesday, marking its fifth consecutive session of gains as improved global risk appetite fueled a rally in antipodean currencies. The upbeat sentiment followed US President Donald Trump’s recent decision to exempt key technology products from his reciprocal tariffs, alongside reports that his administration may pause the planned 25% tariffs on auto imports. However, uncertainty lingered after the US Commerce Department launched a national security investigation into semiconductor and pharmaceutical imports. On the domestic front, minutes from the Reserve Bank of Australia's April meeting offered little clarity on the timing of the next interest rate move. Policymakers pointed to elevated levels of uncertainty both at home and abroad, keeping future policy decisions data-dependent.

Australian Dollar Extends Rally on Risk-On Mood

The South Korean won weakened to around 1,424 per dollar on Tuesday, retreating from over four-month highs reached in the previous session, weighed down by a rebound in the greenback. The US dollar regained strength following President Trump’s decision to exempt key technology products from reciprocal tariffs, along with reports suggesting a potential pause in his proposed 25% auto import levies. Meanwhile, in South Korea, the government announced significant support measures in response to growing concerns over US policy uncertainties and intensifying global competition. The package includes KRW 33 trillion for the semiconductor industry from 26 trillion won announced in 2024, along with financial assistance for chipmakers totaling KRW 20 trillion, compared to KRW 17 trillion. Finance Minister Choi Sang-mok emphasized that Seoul will 'actively consult with the US' on its Section 232 probes into chip and biopharmaceutical imports to minimize the impact on South Korea’s key industries.

South Korean Won Weakens on Dollar Rebound

The Japanese yen slipped past 143 per dollar on Tuesday, retreating from recent highs as a rebound in risk appetite dampened demand for the safe-haven currency. The shift in sentiment followed US President Donald Trump’s decision to exempt key technology products from newly imposed reciprocal tariffs, with reports also suggesting a potential pause on his 25% auto import levies. Despite the improved tone, markets remained cautious after the US Commerce Department launched a national security investigation into semiconductor and pharmaceutical imports, industries deeply intertwined with Asian supply chains. Investors are also closely monitoring upcoming trade negotiations between Washington and Tokyo. Japan’s chief trade negotiator, Akazawa Ryosei, is set to meet with US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer later this week. Japan, which currently faces a reduced 10% tariff rate, is expected to push for more favorable terms amid ongoing talks.

Japanese Yen Weakens as Risk Sentiment Improves

The New Zealand dollar rose to around $0.590 on Tuesday, gaining for the sixth straight session and reaching its highest level since early December 2024, as risk sentiment continued to improve. This followed the US announcement of a tariff rollback on consumer electronics, along with Trump’s suggestion that he may grant exemptions on existing auto-related tariffs. However, caution lingered as the US Commerce Department launched national security probes into semiconductor and pharmaceutical imports. Domestically, investors are awaiting key economic data this week—including the Q1 consumer inflation report and March trade balance—for further insight into price pressures and overall economic conditions. This follows growing signs of a slowing economy, with the services sector contracting for a second straight month and card spending declining, after the RBNZ’s recent rate cut to 3.5%.

NZ Dollar Hits Over 4-Month High

The US dollar index edged higher toward 100 on Tuesday, recovering slightly from recent lows as sentiment around the US economic outlook showed signs of stabilization. The rebound followed President Trump's decision to exempt key technology products from his reciprocal tariffs and reports suggesting a potential pause on his 25% auto import levies. Despite the improving mood, caution remained as the US Commerce Department launched a national security investigation into semiconductor and pharmaceutical imports. On the policy front, Fed Governor Christopher Waller downplayed inflation risks stemming from tariffs, calling them likely "transitory." He also emphasized that the Fed remains open to further rate cuts, signaling that supporting economic growth would take precedence over responding to short-term inflation pressures. The dollar's recovery comes after a sharp three-day drop, when it fell to three-year lows amid heightened policy uncertainty and a broad selloff in US assets.

Dollar Rebounds as Market Sentiment Stabilizes

The Mexican peso strengthened toward 20.1 per dollar, rebounding from the lowest since March 2022 of 20.85 on April 8th, due to the sharp decline in the U.S. dollar, which has fallen to its weakest level since 2022 following China’s aggressive retaliation to U.S. tariffs with 125% duties on American goods. The move triggered a broad-based selloff in the dollar, as markets reassessed the potential damage to the U.S. economy and the likelihood of prolonged trade disruption. However, the Trump administration’s subsequent decision to temporarily exempt select Chinese tech products from tariffs helped ease fears of an imminent U.S. recession, stabilizing risk sentiment and reviving expectations for sustained demand in export-reliant economies like Mexico. As a key supplier to U.S. manufacturing and consumer markets, Mexico stands to benefit from any recovery in U.S. demand, further supporting the peso’s appeal.

Mexican Peso Strengthened to 20.1 per USD

The dollar index fell to 99.6 on Monday, the lowest in three years, as repeated changes to the aggressive series of tariffs by US President Trump triggered selloffs in dollar-denominated assets by both domestic and foreign investors. The President momentarily waved computers and consumer electronic goods from the most recent set of reciprocal tariffs, but warned that new levies on electronics and semiconductors will be introduced shortly. The instability in trade policy was consistent with earlier developments where the White House attached aggressive levies against trade before wavering policy, threatening supply chains for key US industries and driving global funds to shed their positions in US assets as equities sold off and Treasury securities plummeted to tighten swap spreads. On the policy front, softer-than-expected consumer and producer price inflation prints backed expectations that the Fed will deliver multiple rate cuts this year.

DXY Falls to 3-Year Low

The Swiss franc edged slightly lower toward 0.82 per USD but remained near its strongest levels since 2011, as investor uncertainty persisted amid the unpredictability of U.S. trade and economic policy. Some relief came after President Donald Trump announced temporary exemptions on key tech products — including semiconductors and smartphones — from the latest round of tariffs on Chinese imports. However, the U.S. administration later clarified that these items remain subject to existing 20% fentanyl-related tariffs, and a new special tariff targeting semiconductors and electronics is set to take effect in about a month. With the Swiss franc holding firm, economists are increasingly focused on potential measures from the Swiss National Bank (SNB), including the possibility of a rate cut in June if the franc doesn’t soften from its current level.

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