The US dollar is enjoying a firmer bias today. The Dollar Index is threatening to snap a seven-day decline. President Trump has held out the possibility that the “war is close to over”. Yet the improved risk appetites in recent days reflects the market anticipating this. A new round of US-Iran negotiations could begin as early as tomorrow. Seeming unfazed by the US blockade preventing Iranian oil shipments that mostly go to China, the PBOC set the dollar’s reference rate at a new three-year low today.
Yesterday, the same day that the Senate Banking Committee indicated confirmation hearing for Fed chair nominee Kevin Warsh for April 21, leaving 25 days before Powell’s term expires, US prosecutors made an unannounced visit to the Federal Reserve’s offices in Washington. They lacked clearance protocols to enter the construction site. US Senator Tillis has reaffirmed his commitment to block the confirmation until the investigation is resolved.
Prices
G10
• The euro reached its best level since the Middle East war began. It poked slightly above $1.1810 as European session drew to a close yesterday. The euro spent the North American afternoon consolidating and found support ahead of $1.1785. The euro is trading quietly with a heavier bias. It has approached $1.1770 in Europe. It seems like it is between two large option strikes: 2 bln euros at $1.1750 and 1.6 bln euros at $1.18, and both stacks expire today.
• The dollar has recorded two lower higher since it peaked against the yen in late March near JPY160.45. It peaked last week a smidgeon above JPY160 and this week’s high was about JPY159.85. Yesterday’s retreat brought the greenback to JPY158.60, and in the consolidation in the North American afternoon, it could not reclaim the JPY159 handle. It barely traded above there today and held above JPY158.65. Still, a near-term low may be in place, and the US dollar can return to the JPY159.20-40 area. Nearly $1.5 bln in options at JPY158.85 expire today.
• Sterling reached $1.3590 yesterday, its best level since February 17. It stalled a few hundredths of a cent below the (61.8%) technical retracement objective of the losses since the year’s high was recorded in late January (~$1.3870). It settled above the upper Bollinger Band (found near $1.3585 today). Sterling is trading with a slightly heavier bias in a narrow range (~$1.3545-$1.3580). Support may be the $1.3480-$1.3500 area.
• The Canadian dollar reached a three-week high yesterday amid the risk-on environment spurred by reports that US-Iran negotiations may continue later this week. The US dollar was sold the CAD1.3750 area, the halfway mark of the greenback’s rally from the March 9 low (~CAD1.3525). The US dollar bottomed in early North American activity and made its way back to around CAD1.3775. It is hovering around there today (~CAD1.3660-CAD1.3780). Initial resistance is CAD1.3800-25 area.
• The Australian dollar settled a little below $0.7120 before the war began and reached nearly $0.7150 yesterday to kiss the upper Bollinger Band (found near $0.7165 today). It is trading firmly in the upper end of yesterday’s range. It has not been below $0.7115 nor above $0.7150 so far today. The Aussie’s recent high was recorded near $0.7190 last month, its best level since June 2022 after the central bank delivered its second rate hike of the year. Central bank officials have purposely left open the possibility of hike at the conclusion of its next meeting (May 4-5).
EM
• Yesterday, the Mexican peso reached its best level since the Middle East war began. The US dollar slipped briefly below MXN17.20. The greenback quickly recovered and spent most of the North American afternoon chopping between MXN17.25 and MXN17.28. It has been mostly in that range today. Initial potential may extend toward MXN17.30-MXN17.32.
• The yuan rose to a three-year high yesterday. The US dollar traded to about CNH6.8060 yesterday. It was the eighth consecutive session the dollar fell against the offshore yuan. The greenback is trading firmer today and reached slightly above CNH6.82. In the past two weeks, the PBOC lowered the dollar’s reference rate by about 0.75%, the largest two-week adjustment since September 2024. It set the dollar’s fix slightly lower today at CNY6.8583 (CNY6.8593 yesterday).
• Initially the Indian rupee rose as the local markets re-opened from yesterday’s holiday but as the session progressed its gains were pared and the greenback settled near session highs. The dollar opened below Monday’s low (~INR93.2590) and recovered through Monday’s high (~INR93.4075) before settling near INR93.3765. The rupee still looks soft despite equity market gains.
Other Markets
• Asia Pacific equities rallied today, though among the large bourses, China’s CSI 300 is an exception, and it slipped around 0.35%. South Korea’s Kospi led the regional advance with a little more than a 2% gain, followed by India’s 1.6% rise and Taiwan’s nearly 1.2% advance. Europe’s Stoxx 600 is struggling to make much headway after rallying nearly 1% yesterday. US index futures are slightly lower.
• Benchmark 10-year yields are narrowly mixed in Europe. Most yields are +/- half of a basis point. The 10-year Treasury yield is up a basis point to nearly 4.26%. The 10-year JGB yield was practically flat at 2.40%.
• Gold and silver are trading with a heavier bias. The yellow metal initially extended its gains slightly through $4870 to reach its best level since March 19 but was greeted by sellers that drove it back below $4790. It is straddling the $4800 area in late European morning turnover. Silver, too, initially extended its gains to $81 and has reversed lower and is below $79 in European dealings.
• May WTI extended yesterday’s loss and fell slightly below $87 but has since recovered to new session highs (~$92.70) and is consolidating ahead of the North American session.
Data
• The US reports March import and export prices and February TIC data. Import and export prices likely surged last month. The median forecast in Bloomberg’s survey is for import prices to jump to a 3.9% year-over-year increase from 1.3%. That would be the largest increase since October 2022. Export prices had risen 3.5% year-over-year in February and may have accelerated toward 5% in March. The Treasury International Capital report attracts interest from economists and reporters than market participants. Last year, the net inflow of portfolio investment into the US (averaged $118.36 bln a month) was about $1.42 trillion, while the current account deficit was a little below $1.12 trillion. Portfolio capital inflows were about $1.22 trillion in 2024 and around $840 bln in 2023. The Empire State manufacturing survey for April is on tap. It fell to -0.2 in March from 7.1 in February. The risk seems to be on the downside. The Beige Book, the anecdotal summary of the activity in the different Fed regions, prepared for the FOMC meeting on April 28-29 make for interesting headlines but the impact on market expectations will likely be minimal. Fed officials Barr, Hammack and Bowman speak today.
• Eurozone industrial product rose for the first time in four months with a 0.4% gain in February and January’s decline was nearly halved to -0.8% from -1.5%. The national reports were disappointing. Of the eurozone’s four largest members, only Italy eked out a small increase (0.1%), and they were all weaker than the median projections in Bloomberg’s survey. That said, recall that the February manufacturing PMI rose to 50.8 from 49.5, its best reading since June 2022.
• China reports Q1 26 GDP first thing tomorrow. The median forecast in Bloomberg’s survey is a 1.4% quarter-over-quarter expansion after 1.2% in Q4 25. Retail sales and industrial output are expected to have slowed in March. The property market remains problematic, and house prices are expected to continue to drip lower.
Reviewed by Marc Chandler
on
April 15, 2026
Rating:
