The US dollar continues its decline against most G10 currencies, with the exception of the commodity-linked dollar bloc, which remains weak. Ahead of the US jobs report and a key speech by Federal Reserve Chair Jerome Powell, all G10 currencies have appreciated by at least 1% this week. The Swedish krona leads the gains with a 6.7% rise, while the euro has seen its strongest weekly performance since 2009, climbing 4.7%. Meanwhile, the JP Morgan Emerging Market Currency Index has increased by 1.85% this week, marking gains in seven of the first ten weeks of the year. US tariff policies remain unpredictable, raising concerns about inflation and economic growth. Many economists view the uncertainty surrounding these trade policies as exacerbating global trade imbalances in the short term.

Asia Pacific Markets

In the Asia-Pacific region, the Japanese yen has strengthened, with the US dollar falling to JPY147.20, its lowest level since early October. Japan's upcoming labor earnings report could influence market expectations regarding the next interest rate hike, which is currently anticipated in October. Additionally, Japan is set to release its January current account balance, and a small deficit is expected, marking the first such shortfall since early 2023.
The Chinese yuan has also gained, advancing 0.85% this week. While this marks its fourth weekly increase in five weeks, the dollar remains slightly above last month’s low of CNH7.2260. 

European Markets

The euro has reached its highest level since early November, rising to nearly $1.0870. It has surpassed a key technical retracement level and remains on an upward trajectory with little resistance before the $1.0935 mark. The euro’s 4.7% weekly gain is its strongest performance since March 2009. The European Central Bank has signaled a shift in policy, indicating that monetary conditions are now "meaningfully less restrictive," suggesting that further rate cuts may come later in the second quarter. Meanwhile, updated fourth-quarter GDP figures showed minimal growth of 0.1% quarter-over-quarter and 0.9% year-over-year, but this data had little market impact.
The British pound has also strengthened, reaching $1.2945, its highest level since November. The currency recently surpassed a key technical resistance level but has struggled to maintain momentum. The UK’s economic calendar remains light, with the main upcoming release being the January GDP report. 

American Markets

The US dollar’s decline has accelerated, with the Dollar Index dropping to 103.55 in European trading. This move follows the dollar’s break below a key technical support level at 104.00. With limited technical support before the 102.00 level, further downside pressure could emerge. However, the market appears overstretched. Today’s focus is on the US employment report, with forecasts suggesting job creation of around 160,000 in the past month. This compares to an average of 166,000 jobs per month in 2024 and 216,000 per month in 2023. Despite concerns over economic contraction, most data—including PMI, ISM, and durable goods orders—indicate continued expansion. The US labor market added 341,000 jobs in January and February combined. If this trend holds, the March employment figure would need to be around 198,000 to maintain a similar pace.