The Euro continues to benefit from a persistent trend of selling U.S. assets in favor of non-U.S. currencies. The ECB’s latest survey slightly raised inflation forecasts to 2.2% for 2025 and 2% for 2026, with long-term expectations steady at the 2% target, while economic growth projections were lowered to 0.9% and 1.2% for 2025 and 2026, respectively, and unemployment forecasts improved to 6.3%. ECB President Lagarde emphasized a data-dependent approach to potential pauses in the rate-cutting cycle, while ECB de Guindos suggested the Euro could challenge the dollar as a reserve currency if Europe deepens integration, though this is a long-term goal. April Preliminary PMI data for the Eurozone, including Germany and France, is due today, with manufacturing PMIs expected to remain contractionary and France’s services sector likely to lag.

U.S.-Japan trade talks are critical, with markets watching for Trump’s concessions on tariffs, which could support the dollar and risk assets while prompting profit-taking on yen longs. Japan, led by Prime Minister Ishiba, is pushing back to protect its interests and engaging China to avoid trade friction. Quick wins like tariff-free U.S. rice imports are likely, but Japan’s Finance Minister Kato may avoid firm currency commitments, favoring “market-determined rates.” The BOJ remains cautious on rate hikes, potentially cutting 2027 inflation forecasts to 2% and this year’s growth projection from 1.1% to 0.5% due to a stronger yen and tariff uncertainties.

The Australian Dollar appears to be forming a bottom as investors rotate out of USD assets, with potential for further gains if China bolsters economic support to counter U.S. tariffs. And although U.S.-China trade dynamics remain volatile, the Trump administration’s signaling of a softer stance has helped the Australian Dollar. OIS markets are pricing in a certain RBA rate cut in May, as economic growth concerns outweigh inflation risks.

The Euro has been a prime beneficiary of the ongoing “Sell America, Buy Gold, and non-USD currencies” theme, driven by a weakening U.S. dollar, which is increasingly treated like an emerging market currency despite its yield advantage. The Euro’s strength, as the largest DXY component, is bolstered by Chinese investors and global asset managers diversifying into European bonds, particularly German bunds, amid U.S. trade policy volatility under President Trump. The ECB’s recent rate cut and dovish leanings have not dented the Euro’s bull case, with improving Eurozone growth prospects and resilient service PMIs in Germany more than offsetting. Geopolitical developments, including Russia’s openness to a Ukraine ceasefire and Trump’s NATO proposal, further reduce regional risk premiums, indirectly supporting the Euro’s upward trajectory. Looking ahead, key standouts on Tuesday’s calendar come from some ECB speak, Fed speak, Eurozone consumer confidence, the Richmond Fed manufacturing index and BOE speak.

The Pound has run up to a fresh yearly high against the Buck, buoyed by optimism around a potential UK-U.S. trade deal. Vice President Vance has been on the wires saying there is a good chance a deal will get done. The UK’s strategic pivot to a narrow economic agreement, avoiding contentious issues like agriculture, has helped to mitigate tariff impacts and preserve GBP stability. Looking ahead, key standouts on Tuesday’s calendar come from some ECB speak, Fed speak, Eurozone consumer confidence, the Richmond Fed manufacturing index and BOE speak.

CFTC data shows speculators’ net long JPY positions surging to 171,855 contracts, driven by heightened U.S.-Japan trade tensions and a weakening U.S. dollar amid fears of U.S. stagflation and declining asset credibility. Japan’s firm stance in trade talks, with PM Ishiba resisting U.S. demands for greater auto and agricultural market access while prioritizing national interests, has also fueled a risk-off sentiment supporting the Yen on traditional correlations. The Bank of Japan’s commitment to gradual rate hikes, despite potential downward revisions to growth and inflation forecasts, further underpins the Yen’s appeal. Looking ahead, key standouts on Tuesday’s calendar come from some ECB speak, Fed speak, Eurozone consumer confidence, the Richmond Fed manufacturing index and BOE speak.

The Australian Dollar has been resilient, despite tariff uncertainties, on account of offsetting expectations for Chinese policy stimulus to counter U.S. tariffs. The RBA’s cautious stance on rate cuts, with markets pricing in a May cut following robust labor data has also tempered expectations for an aggressive easing response. Upcoming April PMI surveys will be closely watched for any indication of tariff impacts on Australia’s economy. Looking ahead, key standouts on Tuesday’s calendar come from some ECB speak, Fed speak, Eurozone consumer confidence, the Richmond Fed manufacturing index and BOE speak.

The shifting landscape amidst a more unpredictable set of policies from the US administration has forced a major reconsideration of the US Dollar as the choice currency. Chinese investors are shifting from US Treasuries to European bonds, particularly German, Spanish, and Italian debt, while global asset managers like Vanguard and Citigroup favor European bonds, expecting ECB rate cuts and improved fiscal conditions.

Japan’s March CPI data indicates persistent inflation, with core CPI rising 3.2% year-on-year, exceeding the Bank of Japan’s 2% target for nearly three years. This reinforces the central bank’s overall hawkish stance, though the BOJ is expected to cautiously pause rate hikes due to economic pressures from U.S. tariffs on Japanese goods. U.S.-Japan trade talks are progressing, with Japan aiming for favorable tariff exemptions, potentially sparking a relief rally in risk assets and impacting yen long positions, while a second round of discussions on April 24 may address currency issues amid U.S. accusations of yen weakening. Speculative net long yen positions have surged to 171,855 contracts, and a major Japanese bank has lowered its year-end dollar forecast to 137.50, citing concerns over U.S. stagflation and asset credibility.

The Australian Dollar has been performing well of late, potentially signaling a bottoming process for AUD/USD amid a shift away from USD assets and possible Chinese policy support against U.S. tariffs. Despite a robust Australian labor market with a March unemployment rate of 4.1%, the Reserve Bank of Australia is expected to cut rates in May, as markets anticipate economic growth concerns will outweigh inflation risks, with the RBA’s April meeting minutes indicating a cautious approach to policy adjustments. The U.S.-China trade tensions have weighed more heavily on the U.S. dollar than Aussie, positioning the dollar as a new risk currency, while markets await further Australian economic data to confirm the RBA’s rate cut decision at the May 19-20 meeting.

Then Yen has reconsidered the latest run of gains from optimism around progress on trade between Japan and the United States. This follows Japanese trade representative Akazawa’s comment that the Yen didn’t get any mention during the ongoing talks. On the data front, Japan inflation data didn’t inspire much volatility after coming in as expected on the whole. Looking ahead, there is no first tier risk on the calendar for the remainder of the day, leaving all of the focus on the bigger picture stories.

The Canadian Dollar has retained a bid tone into the end of the week, getting its latest boost from a surge in the price of oil on the back of the news out of the Financial Times that China is helping the Houthis target US ships. Looking ahead, there is no first tier risk on the calendar for the remainder of the day, leaving all of the focus on the bigger picture stories.

Then Yen continues to be a beneficiary of US-China trade tensions. Japan’s Prime Minister Ishiba highlighted the disruptive potential of US tariffs, signaling readiness for economic measures like a possible supplementary budget, while upcoming US-Japan trade talks on April 17 could pressure the Bank of Japan to raise rates if linked to Yen weakness and trade imbalances. Speculative JPY long positions have spiked, and a favorable deal for Japan could spark a risk asset rally, while narrowing US-Japan yield differentials may further strengthen the Yen if the Federal Reserve cuts rates. Key standouts on today’s calendar come from German wholesale prices, UK employment, Eurozone industrial production, German and Eurozone ZEW reads, Canada inflation, US import and export prices, Empire manufacturing, and Fed speak.

The Euro has resumed its uptrend, extending to a three-year peak at 1.1474. The single currency is gaining as a haven asset amid a flight from U.S. assets, while the dollar’s yield advantage weakens, diverging from the German 10-year and U.S. 10-year yield spread. Meanwhile, the EU’s pause on U.S. tariffs and pursuit of diversified trade partnerships signal a strategic shift amid U.S. policy uncertainty. The ECB is expected to cut rates by 25 basis points on April 17, with markets pricing in 78bps of cuts this year, reflecting disinflationary pressures from U.S. tariffs. Key standouts on Monday’s calendar come from US consumer inflation expectations and Fed speak.

The Pound remains in demand, driven by broad based US Dollar selling and robust UK economic data. The latest round of impressive UK data includes a 0.5% month-on-month GDP increase, reversing a prior 0.1% decline. Meanwhile, industrial production surged to 1.5% from -0.9%, and manufacturing hit a 2022 peak at 2.2%, up from -1.1%, signaling strong economic momentum. Key standouts on Monday’s calendar come from US consumer inflation expectations and Fed speak.

Then Yen has emerged as a top-performing G10 currency, driven by safe-haven demand amid escalating U.S.-China trade tensions. Japanese household inflation expectations have surged to a 9.6% average over the next five years, the highest since June 2006, potentially reviving BOJ rate hike expectations if U.S.-Japan trade talks on April 17, involving U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, lead to pressure for a stronger yen to address trade imbalances. Markets may increase yen longs ahead of the talks, anticipating Japan could secure a favorable deal, especially as OIS markets currently expect a BOJ rate hike pause but could shift if tariff negotiations spotlight the yen. Key standouts on Monday’s calendar come from US consumer inflation expectations and Fed speak.

The Australian dollar faces headwinds as a yuan proxy amid U.S.-China trade tensions, with the yuan fixing at its weakest since September 2023. Many analysts expect China to avoid a sharp devaluation, prioritizing global stability, reducing the likelihood of revisiting its COVID-era low of 0.5510. RBA Governor Bullock has resisted pressure for a 50bps rate cut in May, citing the need to assess global demand and supply impacts from U.S. tariffs, but OIS markets still price in a certain cut, driven by economic growth concerns outweighing inflation risks, as seen in past crises. Contrarian strategists argue the Australian Dollar may be oversold, with China’s potential stimulus expansion expected to be discussed Thursday, likely to boost demand for Australian commodities, while the RBA remains cautiously optimistic about China’s infrastructure and monetary measures offsetting trade war effects. Key standouts on Monday’s calendar come from US consumer inflation expectations and Fed speak.

EU Commission President Ursula von der Leyen has suspended planned tariffs on US products for 90 days, following a US call for a pause on reciprocal tariffs, to allow time for negotiations. Friedrich Merz, Germany’s likely next chancellor, supports dialogue but stresses the EU’s readiness to protect its interests, noting that Trump’s unpredictable approach has created uncertainty and criticism in the US. Bloomberg economists predict a 25bps ECB rate cut on April 17, expecting US tariffs to reduce euro area demand and inflation, with markets anticipating 75bps in cuts over the year. Key standouts on Friday’s calendar come from German inflation data, UK GDP, trade, industrial production, construction output, an ECB Lagarde speech, US producer prices, Michigan sentiment, and Fed speak.

Then Yen has extended its run against the US Dollar amid escalating US-China trade tensions. The US Trade Secretary attributed Yen strength to Japan’s robust economic growth and inflation expectations, suggesting BOJ rate hikes are natural. Japan faces potential US pressure to raise rates in upcoming trade talks to address Yen weakness and trade imbalances, with markets pricing in minimal BOJ hikes but higher odds if tariffs are moderated. Recent strong Japan PPI data (4.2% YoY vs. 3.9% forecast) supports rate hike speculation. Japan’s strategic importance and Trump’s appointment of key negotiators could lead to lenient tariff terms, with traders eyeing more Yen gains if a favorable deal emerges. Key standouts on Friday’s calendar come from German inflation data, UK GDP, trade, industrial production, construction output, an ECB Lagarde speech, US producer prices, Michigan sentiment, and Fed speak.

The Australian dollar has benefited from broad based currency demand but faces pressure as a risk-sensitive currency amid ongoing US tariffs on China, Australia’s key trading partner. But at least for now, fears of revisiting its COVID-era low of 0.5510 have eased. The yuan’s stable fixing at 7.2087 signals China’s intent to avoid sharp devaluation, prioritizing global stability over tariff countermeasures. Meanwhile, RBA Governor Bullock has resisted calls for a 50 basis point rate cut in May, emphasizing a cautious approach to US tariff impacts and noting Australia’s resilient financial system, with market volatility expected but economic fallout limited compared to 2008. Key standouts on Friday’s calendar come from German inflation data, UK GDP, trade, industrial production, construction output, an ECB Lagarde speech, US producer prices, Michigan sentiment, and Fed speak.

We’ve seen a surge in demand for the Canadian Dollar on the back of President Trump’s 90-day tariff pause. The resulting development has translated to broad based risk on flow and concurrent surge in the price of oil. Meanwhile, PM Carney has been helping the Canadian Dollar this week as well, after pledging to make Canada an energy superpower. Key standouts on Friday’s calendar come from German inflation data, UK GDP, trade, industrial production, construction output, an ECB Lagarde speech, US producer prices, Michigan sentiment, and Fed speak.

ECB Villeroy cautiously welcomed President Trump’s 90-day tariff pause but noted US unpredictability still hampered the growth outlook. Meanwhile, BNP Paribas’ chief economist urged the EU to focus on domestic growth via single-market investments rather than retaliation. ECB Holzmann suggested pausing rate cuts in April due to trade uncertainty, despite markets expecting a cut. And a UK-EU defense pact eyes a May 19 completion date to bolster European security amid US policy shifts. Finally, ECB Cipollone was out pushing for digital euro and cash regulations to reduce reliance on foreign payment firms. As far as today’s economic calendar goes, key standouts come from US initial jobless claims and inflation data.

President Trump’s erratic tariff policies have undermined the dollar’s safe-haven status, boosting the Yen as a consequence. Japan PM Ishiba aims to leverage Trump’s pause on reciprocal tariffs to negotiate better terms on steel and auto levies, banking on Japan’s strategic alliance and investment in the US, with key appointees Bessent and Greer leading talks. Bloomberg Economics has warned that if the 24% tariffs and 25% auto levy resume, Japan’s GDP could drop by 0.9%, while OIS markets now see little chance of rate hikes this year. As far as today’s economic calendar goes, key standouts come from US initial jobless claims and inflation data.

The Australian Dollar rebounded from a year-to-date low after President Trump’s tariff pause eased risk aversion. Despite levies persisting on China, and Trump’s unpredictable tariff stance, the risk of deeper setbacks in 2025 has eased for now. In fact, there have been some strategists making a bullish case for the Australian Dollar, citing China’s stimulus boosting commodity demand and US economic self-harm from tariffs. There is support for this view via CME data showing call options doubling puts. Meanwhile, Treasurer Chalmers has convened top economic leaders to mitigate global volatility. Speculation has been growing for a potential 50 basis point RBA cut in May. As far as today’s economic calendar goes, key standouts come from US initial jobless claims and inflation data.

We’ve seen a surge in demand for the Canadian Dollar on the back of President Trump’s 90-day tariff pause. The resulting development has translated to broad based risk on flow and concurrent surge in the price of oil. Meanwhile, PM Carney has been helping the Canadian Dollar as well, after pledging to make Canada an energy superpower. As far as today’s economic calendar goes, key standouts come from Canada building permits, US initial jobless claims and US inflation data.

The Euro continues to be a beneficiary of all of the turmoil around US trade tariffs, with market participants opting to find comfort in the single currency amidst President Trump’s 104% China tariff confirmation. The EU is preparing to counter President Trump’s 25% tariffs on steel and aluminum with levies next week, followed by a second phase addressing US tariffs on auto exports. Meanwhile, the ECB is expected to cut rates consecutively to 1.5%. Looking ahead, key standouts on the calendar come from ECB speak, Fed speak, and the Fed Minutes late in the day.

The Pound has been a beneficiary of fallout from the US Dollar on the back of unpredictability and uncertainty around the outlook for the US economy amidst an intense round of tariffs and escalation in trade tension. PM Starmer’s maintenance of a pragmatic, all hands on deck approach to negotiations with the US has also served to keep the Pound well supported into dips. Looking ahead, key standouts on the calendar come from ECB speak, Fed speak, and the Fed Minutes late in the day.

Following a call with President Trump, Japanese PM Ishiba secured Japan a spot on the “priority” list among roughly 70 countries vying to negotiate US tariffs, despite his concerns about their alignment with WTO and Japan-USA. trade agreements. President Trump’s appointment of Treasury Secretary Bessent and Trade Representative Greer to lead talks signals a potentially favorable and swift resolution for Japan, leveraging its role as a key US. ally and top investor, with hopes of milder tariff terms and discussions possibly involving a stronger yen. OIS markets are now expecting just 10 basis points of BOJ rate hikes for the year, largely dismissing earlier rate hike bets amid the tariff fallout. Looking ahead, key standouts on the calendar come from ECB speak, Fed speak, and the Fed Minutes late in the day.

The Australian Dollar has sunk to yet another yearly low and sits at its lowest level against the US Dollar since 2020. The risk correlated commodity currency has been unable to ignore fallout in US equity markets and global risk reduction on the back of an intensification of trade wars. The latest US +100% tariff on China is driving fresh Aussie selling given the Australian economy’s close relationship with China as its top trading partner. Futures markets now anticipate the RBA will slash rates in May, July, and August, with two more cuts to follow thereafter. Looking ahead, key standouts on the calendar come from ECB speak, Fed speak, and the Fed Minutes late in the day.

The Canadian Dollar has done a formidable job shaking off the latest downside risk from lower US equities and lower oil on the back of escalating global trade tensions. It seems the Loonie is more focused on the fact that Canada may have avoided additional tariffs from the Trump administration. Looking ahead, key standouts on the calendar come from ECB speak, Fed speak, and the Fed Minutes late in the day.

The New Zealand Dollar extended its decline to another yearly low earlier today, on the back of a fresh wave of risk off flow from escalating tensions on the global trade front. Meanwhile, the RBNZ went ahead and cut rates 25 basis points as widely expected and looks set to increase the pace of easing at the next meeting in May. The RBNZ considers US reciprocal tariffs a major threat to global economic growth and domestic inflation prospects, and noted there was room to cut the official cash rate further as the tariffs’ impacts unfold. Looking ahead, key standouts on the calendar come from ECB speak, Fed speak, and the Fed Minutes late in the day.

The Euro has edged up against the US Dollar on a cautious market response to renewed US Dollar strength and as traders weigh the potential for retaliatory moves from Europe against US trade policies. At the same time, the rally has been tempered on expectations of a dovish ECB stance amid tariff-related uncertainties. Key standouts on Tuesday’s calendar come from ECB speak, Canada Ivey PMIs, and some Fed speak.

The Pound came under quite a bit of pressure on Monday on the back of uncertainty around the fallout from China’s retaliatory tariffs. Markets have now priced an additional 30 basis points of cuts from the BoE in the first week of April alone, while eyeing an additional 80 basis points of rate cuts by year end. Key standouts on Tuesday’s calendar come from ECB speak, Canada Ivey PMIs, and some Fed speak.

According to Treasury Secretary Bessent, Japan PM Ishiba arranged a highly productive call with President Trump, reportedly securing Japan a top spot among countries awaiting negotiations with the United States. Key standouts on Tuesday’s calendar come from ECB speak, Canada Ivey PMIs, and some Fed speak.

The Australian Dollar has been getting some welcome relief early Tuesday as the market tries to look for the worst to the out of the way with respect to fallout from US tariffs. However, there is still plenty of uncertainty out there and a rate cut from the RBA in May followed by 3 more cuts thereafter is looking increasingly likely. Key standouts on Tuesday’s calendar come from ECB speak, Canada Ivey PMIs, and some Fed speak.

The Canadian Dollar has managed to steady itself a bit on the back of a rebound in oil prices and comments from PM Carney that the US is driving itself into recession. Key standouts on Tuesday’s calendar come from ECB speak, Canada Ivey PMIs, and some Fed speak.

The New Zealand Dollar has managed to find some bids on Tuesday thus far, with the currency following along with a period of relief in risk assets. Still overall, there continues to be plenty of uncertainty around the state of global trade, which could the Kiwi rate well offered into rallies. Key standouts on Tuesday’s calendar come from ECB speak, Canada Ivey PMIs, and some Fed speak.