The US dollar stays confined to familiar ranges. Markets are anticipating the European Central Bank's widely expected quarter-point rate cut, after which liquidity is projected to thin quickly due to upcoming holidays in Europe and North America. Several European markets, including the UK, will also be closed on Monday. The yen, despite hitting a six-month high recently, is the weakest performer today. The dollar is also advancing against most emerging market currencies, with the Chinese yuan, Russian ruble, and Indian rupee being the primary exceptions.

Asia Pacific Markets

The Japanese yen lost ground after climbing to a yearly peak, as optimism from US trade negotiations shifted sentiment. President Trump's comments about progress in talks weakened the yen further, despite no specific discussion on foreign exchange. Meanwhile, the link between US 10-year yields and the yen has diminished significantly.
In Australia, the local currency touched a near two-month high but faced resistance near the $0.6400 level. Job data showed Australia added 32,000 positions in March, with full-time employment recovering and the unemployment rate ticking up slightly to 4.1%.

European Markets

The euro rallied strongly, nearing key resistance levels before slipping slightly as attention turned to the ECB's decision. A rate cut is widely anticipated, pushing the deposit rate to 2.25%, the upper end of the perceived neutral range. The ECB may have to cut below that range as economic pressure builds.
In Switzerland, the franc has gained on low inflation and rising speculation that the Swiss National Bank could act before its next scheduled meeting.
Meanwhile, sterling saw its week-long rally stall after climbing to $1.33. Despite the pullback, markets still expect a 25-basis-point cut in the Bank of England’s upcoming meeting.

American Markets

The US Dollar Index is trading defensively, hovering around 99.20–99.75 following a close near session lows. With a long holiday weekend ahead, key economic indicators like housing starts, jobless claims, and the Philly Fed survey are unlikely to significantly influence markets. The primary focus remains on the trade war, with the US administration eager to demonstrate progress. However, analysts argue China may have more flexibility to adapt via domestic policies and alternative trade partners. Fed Chair Powell reiterated a steady stance, signaling no urgency for policy changes as the labor market remains stable and inflation pressures are manageable.