### United States
Today, the US dollar is performing better against most major currencies, with the Japanese yen being the only exception among the G10 currencies. The Tokyo CPI data did little to alter Bank of Japan expectations, while a decrease of around seven basis points in the US 10-year yield from yesterday’s peak has supported the yen. Recent US auto tariffs have unsettled equity markets, impacting indices in Tokyo, Taiwan, and South Korea, but Australia’s bourse closed higher. US index futures continue to soften. Bond markets are showing strength, as European benchmark 10-year yields have dropped by roughly four basis points, with the UK Gilt decreasing by over five basis points despite unexpectedly strong retail sales data. Gold’s value continues to soar, reaching a new peak at nearly $3086, rising from around $3022 last week. Meanwhile, May WTI has stabilized near $70, reflecting a weekly increase of almost 2.6%.
### Eurozone
The euro made an impressive move yesterday, peaking above $1.08 before encountering resistance and retracting, but still managing to close above its 20-day moving average. Today, it is facing selling momentum above $1.0800 where option expiries are in play. Recent surveys revealed minor changes in February’s inflation outlook across the Eurozone, with both France and Spain reporting lower-than-expected CPI figures for March. France’s harmonized CPI rose by 0.2%, maintaining the year-over-year rate at 0.9%, while Spain saw a 0.7% increase, with the annual rate dropping to 2.2% from 2.9%. Eurozone’s preliminary March CPI report, scheduled for tomorrow, could affect the EUR/USD pair, particularly if the year-over-year rate edges closer to 2.1%.
### United Kingdom
Sterling initially fell to a recent low yesterday but recovered to close near previous highs. Notably, the UK reported unexpectedly strong retail sales figures and achieved its first trade surplus, excluding precious metals, since 2021. After revised January sales data pointed to a 1.4% gain, February data showed a further 1% rise, representing volume rather than value. Moreover, even while factoring out gasoline, retail sales continued to rise. The UK’s January trade balance showed a GBP537 mln surplus minus precious metals. This indicates potential resilience and even bullish outlook for sterling despite broader market pressures.
### China
Amid ongoing trade tensions, China remains firm in its communications with the US, particularly concerning President Trump’s proposition to ease tariffs in exchange for TikTok transactions. In the business environment, Beijing appears to dissuade state enterprises from partnering with Hong Kong magnate Li Ka-shing’s family. The US dollar has maintained its range against the offshore yuan, suggesting a stable yet cautiously watchful market posture. Should the dollar breach CNH7.2650, it might signal further momentum toward CNH7.25.
### Japan
Yesterday, the dollar reached its highest since early March against the yen, hinting at a strengthening correlation with rising US 10-year yields, which came close to 4.40%. Despite recently stronger-than-expected Tokyo CPI data, with the core measure rising more than anticipated, the swaps market exhibited little change in BOJ expectations. The dollar’s softer movement today and the subsequent lower yield (around 4.33%) suggest potential easing pressures on the yen.
### Canada
The US dollar showed minor volatility against the Canadian dollar, making a new low for March but then exhibiting marginal recovery. Following recent US tariff announcements, the exchange rate momentum could see the loonie pushing towards CAD1.4350-60, which may lead to even broader highs should resistance levels break. Canada’s GDP data today is anticipated to show a 0.3% monthly growth rate, though the substances of US policy shifts may override its impact in the markets.
### Australia
With recent global uncertainties, the Australian dollar has largely consolidated within a narrow band over the past few sessions. The momentum indicators offer limited insight, though economic activity is expected to pick up with scheduled retail, trade, and household expenditure reports. The upcoming central bank meeting could shed light on fiscal strategy and election-related fiscal measures, especially with futures suggesting a significant chance of rate adjustments in forthcoming convocations.
### Mexico
The Mexican peso experienced pressure after Banxico’s anticipated rate cut announcement, which failed to significantly shift expectations—as traders perceived these as part of a gradual monetary strategy due to broader trade reshoring challenges. Further currency weakness could test support levels if the dollar rises past key resistance around MXN20.40-42, heightening potential trends that might see rates approaching March highs near MXN21.00.
