Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Markets brace as tariff drama unfolds
The tariff newsflow eased on Monday leading to a lackluster rebound in US assets.
The USD continued to retreat as the Fed’s Waller delivered dovish comments, suggesting the central bank would prioritize recession risks over inflation concerns if tariffs impact economic growth.
European equities outperformed their US peers while EUR gains were capped by tactical profit-taking.
Asian markets appear cautious with focus on today’s PBoC USD/CNY fixing.
The RBA minutes, UK labor data and German ZEW survey will be key events to watch today.
In FX markets, AUD gained 0.62%, with 200-day EMA 0.64127 in sight. NZD/USD gained a whopping 0.89%, and broke 200-day EMA of 0.5841. The USD/SGD gained 0.3% while the USD/CNH turned down 0.3%.
Ueda of the BoJ doesn’t seem keen on supporting the Yen
When US Treasury Secretary Bessent and his Japanese counterpart Kato meet this week, Japanese Economic Revitalisation Minister Akazawa stated that he anticipates the two would talk about foreign exchange.
But BoJ governor Ueda isn’t indicating that he would be willing to provide more robust rate guidance to support the yen.
Actually, the opposite is true. He said that tariffs were already putting downward pressure on the Japanese economy and that they had increased economic uncertainty. He said that the economy and inflation will be the targets of his policy choices.
The USD/JPY is still forming a head and shoulders top on the weekly chart.
This negative pattern will be completed if the weekly closing falls below 140.25.
MAS easing measured, more to come
In contrast to our assumption of a more significant shift to a 0% appreciation slope, the Monetary Authority of Singapore eased policy on Monday by lowering the SGD NEER slope to an anticipated 0.5% annually.
Although the MAS remained cautious due to elevated external uncertainties, it did not rule out more easing and maintained highlighting the negative risks to inflation and GDP.
USD/SGD fell 3% from April 8 highs of 1.35508.
It is now at the low end of 30-day trading range, with key support at 1.31319, near its five-month lows.
Antipodeans flirt with the top end of trading range
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 14 – 18 April
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
