Despite the Easter holiday limiting market movement, the US Dollar continues to weaken as concerns grow over the US economy amid tough trade and political policies. Traders dismissed positive news about Russia, the Middle East, and China’s stimulus, focusing instead on the negative impact of the US trade wars. As the IMF's meeting begins, optimism around US-backed peace efforts with Russia and a potential ceasefire in Israel didn't stop the USD's decline.
This led to the US Dollar Index (DXY) hitting its lowest point since March 2022. Major currencies and commodities, including Gold, EURUSD, GBPUSD, NZDUSD and AUDUSD, saw gains, while USDJPY and USDCAD dropped to multi-month lows. Crude oil slipped, but cryptocurrencies and stocks in China and India made gains, while Tokyo saw losses.
EURUSD hits its highest since November 2021, boosted by broad US Dollar weakness and optimism over a potential EU-US trade deal, despite the Easter Monday holiday and concerns about inflation and growth in the EU conveyed by the ECB officials.
Similarly, GBPUSD reaches a fresh 6.5-month high as the US Dollar weakens and hopes rise for a UK-US trade deal, with UK economic worries taking a backseat for now.
USDJPY hits a 7-month low as Japanese diplomats return empty-handed from Washington, dismissing any "quick deals" with Trump. Tariff concerns and Japan’s rate hike expectations boost the safe-haven Yen, especially amid global trade and geopolitical tensions. It’s worth noting that the Fed's hawkish credibility is in question and exerts additional downside pressure on the Yen pair.
The Australian, New Zealand, and Canadian Dollars (Antipodeans) rise on a weaker US Dollar and China’s stimulus plans, overlooking the dovish outlooks from the RBA, RBNZ, and BoC. Despite a pullback in oil prices and concerns over US-Canada trade ties, the USDCAD drops to its lowest since October 2024. Meanwhile, AUDUSD and NZDUSD hit fresh 2025 highs.
Gold hits a new all-time high near $3,385, driven by a weaker US Dollar, strong demand from China and India, and its safe-haven appeal. The metal is on track to surpass $3,400 as bullish sentiment grows.
Meanwhile, crude oil benefits from easing tensions in the Middle East, with US-Iran peace talks progressing and Hamas moving toward a long-term ceasefire with Israel. However, concerns over slowing energy demand due to trade protectionism and rising OPEC+ oil output challenge oil buyers, despite a softer US Dollar providing some support.
Bitcoin (BTCUSD) and Ethereum (ETHUSD) bounce back from earlier losses, boosted by a weaker US Dollar and active market conditions during the Easter holidays. Technical breakouts and Trump-inspired optimism also support the rally. However, concerns over the White House’s role in crypto, mixed US SEC updates, and significant ETF outflows are weighing on buyers of both cryptocurrencies.
With holidays in Australia, New Zealand, Germany, Switzerland, France, and the UK, global markets are expected to stay quiet on Monday. However, US traders returning from the long weekend may add some movement, reacting to the latest US tariffs and political news.
Meanwhile, key data like April PMI readings, US Consumer Confidence, and Durable Goods Orders will keep traders engaged during the short week.
That said, expect the US Dollar to remain weak as doubts over Trump’s policies persist, which could help other major currencies and commodities build on recent gains.
May the trading luck be with you!
