The US dollar starts the new week with strength, showing resilience against most major currencies. The weakest performers include the dollar-bloc and Scandinavian currencies, while the euro and British pound remain relatively unchanged. A decline in the US 10-year Treasury yield has boosted the Japanese yen by nearly 0.5%. Among emerging market currencies, the Chinese yuan has shown gains, along with a recovery in the Turkish lira after recent losses. 
Equity markets are experiencing significant pressure due to the impact of US tariffs. Meanwhile, safe-haven investments such as government bonds and gold have seen gains, with gold hitting a new record high near $3125 per ounce.

Asia Pacific Markets

The Japanese yen has gained strength due to declining US Treasury yields, with the dollar retreating from a peak of JPY151.20 to below JPY149. Japan’s economic indicators reveal a mixed picture; industrial production rebounded in February with a 2.5% increase, following a decline in January. Retail sales also posted modest growth, supporting a marginally positive economic outlook for the country. Investors are now focused on the upcoming Tankan Survey, which is expected to reflect weaker sentiment among manufacturers due to global trade uncertainties.
In Australia, the local dollar has depreciated, reaching its lowest level since early March. It remains within the broader trading range of $0.6200 to $0.6400. The Reserve Bank of Australia is widely expected to maintain its interest rate at 4.1% in its upcoming meeting, following a cautious stance. 

European Markets

The euro has staged a modest recovery after falling from $1.0955 to $1.0735, climbing to $1.0850 by the weekend. Investors are watching inflation data closely. Reports from major economies such as Germany, France, Spain, and Italy suggest a potential slowdown in inflation, though its market impact remains uncertain. Geopolitical shifts continue to weigh on sentiment, with US policy shifts creating additional complexity in European trade and security relations.
The British pound has struggled to break past the $1.30 level despite recent rallies. It has been fluctuating within a narrow range, with limited downside movement. Economic data releases in the UK, including consumer credit and mortgage figures, have had minimal market impact. The upcoming release of final March PMI data and car sales figures could provide further insight into the UK’s economic direction. 

American Markets

The US dollar index ended last week near 103.75, approaching key support levels. If it breaks below 103.15, further downside movement is possible. The coming week presents three crucial factors affecting market sentiment: US tariff policies, capital flows, and labor market data. President Trump has indicated possible flexibility in implementing new trade tariffs, with potential exemptions in specific sectors such as pharmaceuticals and semiconductors. However, uncertainties remain about the extent of tariff enforcement.
The US stock market is facing pressure, with the S&P 500 down nearly 2% and the NASDAQ declining over 3% in the past sessions. Meanwhile, labor market indicators are being closely watched, with expectations of a 135,000 job increase for March. The unemployment rate, which ranged between 4.0% and 4.2% in late 2024, may see an uptick. The Federal Reserve’s policy direction will likely depend on labor market conditions, with further easing expected if economic conditions deteriorate.