The foreign exchange market remains subdued, with the U.S. dollar showing minimal movement against G10 currencies, staying largely within established recent ranges. While currencies like the Australian and Canadian dollars are showing some firmness, others, such as the yen and the British pound, have weakened. In emerging markets, Asia Pacific currencies are holding steady or appreciating, whereas Central European currencies are under pressure. This may be influenced by the euro, despite stronger-than-anticipated eurozone GDP growth in Q1. In China, the central bank continued to lower the yuan reference rate for the fifth session, ahead of the May Day holiday. Meanwhile, a policy shift from President Trump has excluded steel and aluminum from new auto tariffs.

Asia Pacific Markets

The Japanese yen is currently the weakest G10 currency, pressured by disappointing domestic data. Both industrial production and retail sales fell more than expected in March, casting doubt on economic strength. The yen continues to trade within a tight band against the dollar, with upward momentum limited by weak fundamentals.
In Australia, the dollar recently touched its highest level since December but then declined, facing resistance around the $0.6450 mark. Australian inflation data for Q1 showed modest gains, though underlying metrics revealed easing price pressures. This trend supports expectations that the Reserve Bank of Australia may soon quicken its pace of interest rate cuts.

European Markets

The euro is moving sideways within a well-defined range, with signs pointing to a possible downside risk despite robust Q1 GDP figures from the major eurozone economies. France, Germany, and Italy all posted modest growth, collectively doubling the growth pace seen in the previous quarter. Inflation data shows mixed results, with a moderate rise in German CPI and stronger month-over-month gains in France and Italy.
Meanwhile, the British pound has pulled back after hitting a multi-year high. UK housing data showed a surprising decline, and with political uncertainty mounting ahead of local elections, investor sentiment toward sterling may remain fragile in the short term.

American Markets

The U.S. dollar index is consolidating within a narrow band, reflecting investor hesitation as key economic data looms. Market attention is focused on employment and GDP figures, with expectations of a slowdown in private sector job growth and stagnant economic performance in Q1. Adjustments for gold imports, likely linked to tariff strategies, could distort the trade data. Estimates suggest the U.S. economy may have contracted slightly, with final domestic sales growing at half the pace of the previous quarter. Despite some upward pressure, the dollar’s next significant move will likely depend on whether real-sector data confirms a deeper slowdown.