Despite some markets being closed for Easter Monday, traders continued to sell the US Dollar and favor safer assets like Gold, Japanese Yen (JPY), and Swiss Franc (CHF). The US Dollar is under pressure as confidence in President Trump's trade and political statements wanes, highlighting fears about economic growth. These concerns are intensified by Trump's criticism of the Federal Reserve and his push for rate cuts, further hurting the Greenback's safe-haven status.
Moody's warns that Trump's policies could damage the economy for years, while the Wall Street Journal's Nick Timiraos suggests Trump plans to shift blame to Fed Chair Powell. Meanwhile, Russian President Putin has indicated a resumption of attacks on Ukraine post-Easter, while Trump highlights progress in US-Iran talks and trade negotiations with key partners.
As a result, the US Dollar Index (DXY) remains at its lowest since March 2022, while Gold hits a new record high near $3,495. Further, EURUSD and GBPUSD also hold gains near multi-month highs, while the USDJPY drops to a seven-month low. Moving on, the AUDUSD and NZDUSD print modest gains, whereas USDCAD tests a six-month low.
Meanwhile, crude oil and Ethereum (ETHUSD) show limited upside, while Bitcoin (BTCUSD) rises to a six-week high. Equities appear dicey, and bond yields stay firm amid market uncertainty.
Amid growing concerns over the economic impact of Trump’s policies, the EURUSD and GBPUSD pairs have surged to multi-week highs, disregarding slow progress in US-EU and UK trade talks. EURUSD is at its highest since November 2021, while GBPUSD is at a seven-month peak.
In other news, US-Japan trade talks remain tense, with Washington accusing Tokyo of currency manipulation. Japanese officials are less concerned but will still meet with US Treasury Secretary Bessent on FX matters. Additionally, diverging monetary policies between the Fed and the Bank of Japan continue to weigh on the USDJPY, which has dropped to its lowest since September 2024.
Irrespective of the mixed domestic data, the AUDUSD, NZDUSD, and USDCAD benefited from the weakening US Dollar. The Aussie (AUD) holds firm at its highest since December 2024, while the Kiwi (NZD) rises to a 5.5-month high, ignoring soft New Zealand trade data. Meanwhile, USDCAD drops to a six-month low, despite falling crude oil prices, a dovish Bank of Canada stance, and ongoing US-Canada tensions.
Gold buyers, boosted by central bank purchases, ETFs, and escalating trade tensions, have pushed prices to a record near $3,500. The precious metal continues to live up to its safe-haven status, with strong demand from China and India. However, the return of full markets after the Easter holidays could lead to some consolidation in Gold prices if the US Dollar rebounds.
Crude Oil buyers remain cautious due to mixed signals from Middle East tensions, OPEC+ policies, and energy demand, leaving prices flat after a weak start to the week. Meanwhile, Bitcoin (BTCUSD) hits a six-week high, boosted by the appointment of pro-crypto Paul Atkins as the US Securities and Exchange Commission (SEC) Chairman and a weaker US Dollar. Ethereum (ETHUSD) struggles, however, as mixed industry signals and global economic concerns weigh on buyer confidence.
As most traders return from the Easter holiday, Canada's inflation data, Eurozone Consumer Confidence, and the Richmond Fed Manufacturing Index will headline the economic calendar. These could help the US Dollar recover some recent losses, potentially influencing major currencies and commodities like Gold. However, lack of progress in US trade talks and rising economic fears may continue to weigh on the Greenback, supporting the trend for non-USD assets.
May the trading luck be with you!
