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.