After a volatile start to the week, markets are stabilizing, with the USD, oil, and equities rebounding from yesterday’s losses. Bond yields continue their upward climb. For the time being the independence of the Federal Reserve as taken center stage over tariffs. Trump’s continued attack on Fed chairman Powell is causing extreme nervousness. Referring to Powell as a ‘major loser’ for not cutting interest rates is not inspiring confidence and led the USD to hit new recent lows against major currencies.
News Headlines. India and the US are making progress on a bilateral trade deal, following a meeting between PM Modi and US Vice President JD Vance in Delhi. Modi emphasized cooperation in trade and other sectors. Pharmaceutical giant Roche announced a $50 billion investment in the U.S. over the next five years. The move comes as drugmakers respond to Trump-era tariffs aimed at boosting domestic manufacturing. Gaza’s main rescue service condemned Israel’s probe into the March 23 killings of 15 medical workers, calling it a “fabricated investigation.” Israel cited “professional failures” and dismissed a deputy commander. The Palestinian Red Crescent said the probe shows Israel is “shielding the truth”. Russian forces launched a mass overnight drone attack on Ukraine's Black Sea port city of Odesa, wounding three people and damaging many apartments. Putin signaled openness to talks with Zelensky, saying Russia welcomes peace efforts. Zelensky said Ukraine is ready for any talks that protect civilians
In currency markets. When Japanese Finance Minister meets U.S. Treasury Secretary Scott Bessent in Washington this week, the weakening yen is expected to be a key topic. However, sources say Tokyo will resist any U.S. push to strengthen its currency, citing limited options like intervention or a near-term rate hike. USD is mixed in Asia with the JPY gaining 0.36%, CNY losing 0.35% and THB and MYR shedding 0.55%. AUD and NZD are losing some steam against the USD losing 0.21% and 0.06% respectively.
In commodity markets. Oil prices fell 2.5% as market sentiment turned negative, influenced by demand concerns, tariff uncertainty, Trump’s pressure on the Fed, and progress in U.S.-Iran nuclear talks. Gold prices surged to $3,500 before retreating amid the ongoing Trump vs. Powell tensions. The precious metal, often a safe-haven asset, has risen by 32% this year due to economic and geopolitical uncertainty. Agricultural commodities are showing a mixed performance, with soybeans rising 0.78%, wheat up 0.09%, and lumber down 1.26%. The USD is finding some support in the ZAR (+0.48%) and the MXN (+0.62%).
Current level USD Index 98.362 Up 0.09%
USD/CAD struggles to recover from six-month lows as a weaker USD weighs on the pair. Ongoing Trump tariff tensions and attacks on Fed Chair Powell have hurt investor confidence and the dollar's appeal. Meanwhile, oil prices remain weak and Canadian political uncertainty ahead of the April 28 snap election may limit further Loonie gains.
Current level USD/CAD 1.3830 Down 0.09%
EUR/CAD is consolidating near the June 2021 highs as market digest the impact of the Trump-Powell situation.
Current level EUR/CAD 1.5898 Down 0.26%
EUR/USD olds steady during European session, pausing after recent gains. The pair may resume its climb as the USD remains under pressure from rising tensions between President Trump and Fed Chair Powell over rate policy.
Current level EUR/USD 1.1495 Down 0.17%
GBP/EUR Global risk aversion continues to weigh on GBP, despite March UK inflation coming in below expectations across all measures
Current level GBP/EUR 1.1632 (0.8594) Up 0.11%
GBP/USD reached a 7-month high against the dollar as concerns over the Federal Reserve's independence grew following U.S. President Trump’s verbal attacks on Fed Chair Jerome Powell. White House adviser said Trump’s team would consider the option of firing Powell.
Current level GBP/USD 1.3374 Down 0.03%
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