Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Trade negotiations talk boosts risk sentiment but gains may be premature
The greenback saw a mixed performance against major peers as US trade deal optimism fueled a risk sentiment boost, even as Treasury Secretary Bessent clarified that comprehensive China negotiations haven’t begun yet.
US equities rallied, with S&P500 gains of 2.5%, closing near 5300.
USD strengthened almost globally except against high-beta LATAM currencies, which outperformed thanks to the US equity rally.
Across the region, the AUD/USD ended back below 0.6400 with a 0.8% loss.
The NZD/USD, down 0.5%, remains below key psychological barrier of 0.6000.
USD/SGD and USD/CNH both ended gains of 0.5% and 0.3% respectively.
Investors will focus on upcoming EU, UK and US PMIs, providing the first look at business reactions to tariffs and trade disruptions.
Fed Barkin: Causes for concern re consumer spending
Non-voter Richmond Fed President Barkin said that inflation expectations could have eased.
There are reasons to be concerned about consumer spending, he continued, and businesses are playing defence by postponing and deferring expenditures.
Looking at APAC FX, USD/SGD has bounced back from oversold RSI levels.
The next key resistance for USD/SGD will be 21 day EMA of 1.3245.
A negative confirmation that exposes USDSGD to more downside, with a target of 1.2789 and a goal of 1.2500 lower, would be closing and holding below 1.3000.
Lagarde of the ECB sounds dovish
In a CNBC appearance, ECB President Lagarde sounded dovish.
She said that while tariffs have a detrimental effect on economy, it is uncertain how they would affect inflation.
In the meanwhile, she said that the EUR’s strength defies logic.
Chart shows EUR/USD has indeed defied gravity and fundamentals and may look to correct given the recent strength.
For EUR/SGD, it has retreated from its highs of 1.5113, and the next key support lies on its 21 day EMA of 1.4793.
Antipodeans retreated from highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 21 – 25 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.
