As the trading week kicked off on April 14, investors found themselves navigating a landscape shaped by a blend of optimism and caution. The market sentiment showed signs of improvement, with investors closely analyzing the latest developments in the ongoing US – China trade conflict. On this Monday, the economic calendar was relatively light, devoid of high – impact data releases. However, several Federal Reserve policymakers were set to take the stage during the American trading hours, potentially offering insights that could sway market dynamics.
US Dollar’s Dwindling Strength: A Seven – Day Snapshot
The performance of the US Dollar (USD) against major currencies over the past seven days painted a picture of weakness. The USD was notably the weakest against the New Zealand Dollar. A detailed table showcasing the percentage change of the USD against major currencies highlighted its decline. For instance, it had dropped by 5.19% against the New Zealand Dollar, 4.51% against the Australian Dollar, and 3.92% against the Euro. The heat map, which provides a visual representation of these currency movements, further emphasized the broad – based depreciation of the greenback.
US – China Trade Developments and Their Market Impact
In a significant development, the Trump administration granted exemptions for certain technology imports from steep reciprocal tariffs on China. Smartphones, computers, laptops, and disc drives were among the products that would be subject to the existing 20% tariffs related to the US fentanyl crisis, rather than the additional 125%. However, this respite was short – lived, as US Commerce Secretary Howard Lutnick announced on Sunday that these products, along with semiconductors, would face new levies within the next two months.
This news had a palpable impact on the markets. US stock index futures experienced a decisive upward movement in the European morning on Monday. At the time of reporting, Nasdaq Futures were up 1.7% for the day, indicating a degree of investor confidence despite the looming trade uncertainties.
The US Dollar Index: A Struggle to Regain Ground
The US Dollar Index, which gauges the USD’s performance against a basket of six major currencies, had a tumultuous week last week. It shed approximately 3% and touched its lowest level since April 2022, nearing 99.00. After a technical correction over the weekend, the index continued to struggle on Monday, remaining in negative territory below 99.30. This ongoing weakness in the dollar was a key factor influencing currency pairs across the board.
Currency – Specific Movements
AUD/USD: Data from China during the Asian trading hours showed that China’s trade surplus narrowed in March. Despite this, the Australian Dollar (AUD) continued its upward climb against the US Dollar. After a gain of more than 4% in the previous week, AUD/USD pushed even higher, rising about 0.65% on the day to reach 0.6330. The strong performance of the AUD was also linked to its close economic ties with China, its largest trading partner.
GBP/USD: Capitalizing on Dollar Weakness：The British Pound (GBP) benefited from the persistent selling pressure on the US Dollar. In the European morning, GBP/USD traded above 1.3150. Market watchers were keeping a close eye on the UK’s Office for National Statistics, which was set to release February employment data on Tuesday. This data could potentially provide further direction for the currency pair.
USD/JPY: Under Bearish Clouds：USD/JPY, which had already lost more than 2% last week, remained under bearish pressure. As the European session began, it traded near 142.50. Earlier in the day, Japanese data showed that Industrial Production in February expanded by 2.3% on a monthly basis, falling short of the market expectation of a 2.5% increase. This data added to the downward pressure on the USD/JPY pair.
Gold: Testing New Heights：Gold had an outstanding performance in the previous week, gaining more than 6% and touching a new all – time high of $3,245 on Friday. Although it opened the new week on a bearish note, it quickly reversed its course, testing the record – high before entering a consolidation phase. At the time of reporting, XAU/USD was trading slightly lower on the day, near $3,230.
EUR/USD: Holding Steady Amid Gains：The Euro (EUR) had a strong showing last week, rising more than 3.5%. In the European morning on Monday, EUR/USD held its ground and traded in positive territory near 1.1400. Eurostat’s February Industrial Production data, scheduled for release on Tuesday, was expected to provide more clues about the Eurozone’s economic health.
Related Topics:
Dollar Under Siege: Trade War Woes and Market Watch
Dollar Drops as Tariff Fears and Economic Worries Boost Safe-Haven Currencies
Dollar’s Global Status in Jeopardy as U.S. Tariffs Trigger Market Panic
