Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Trump confirms China meeting, risk sentiment improves
The greenback fell as Trump’s comments on China meetings triggered market optimism despite Chinese officials’ earlier dismissals of progress.
Euro firmed from around 1.1365 to 1.1395 during Trump’s press conference with Norway’s PM, benefiting earlier from a positive German Ifo survey.
Meanwhile, Fed Waller’s comments that he’d support rate cuts fuel hopes.
In the equities space, S&P 500 gains 2% while Nasdaq was up 2.7% overnight.
US curves bull steepened on Fedspeak suggesting a rate cut could come sooner if labor and growth data weakens notably and/or market volatility remains high.
Singapore industrial production is due for release today while antipodean markets observe local holidays.
NZD/USD was up +0.9% and AUD/USD gains +0.8%.
USD/CNH was flat while USD/SGD was down -0.4% overnight.
Fed Waller said the impact of tariffs is likely to occur in July
If businesses begin to lay off employees and the unemployment rate begins to climb, Fed Governor Waller stated that the Fed would support rate cuts.
Waller, meantime, stated that he believes the effects of tariffs on the economy will become apparent after July, when the jobless rate is expected to rapidly increase.
He also restates that the inflation shock will only last a short while.
Re APAC FX, as we’ve mentioned earlier, USD/SGD has recovered from oversold levels.
The next key resistance levels for USD/SGD will be 21-day EMA of 1.3223, and 50-day EMA of 1.3315.
ECB Rehn says banks should continue cutting, EUR recovers
The ECB According to Governor Rehn, tariffs have a two-pronged effect on inflation in Europe.
He believes the ECB should continue lowering rates if the inflation forecast develops as anticipated.
Nevertheless, EUR/USD looks set to continue higher with key support levels now at 21-day EMA of 1.1208.
For EUR/SGD, the pair also has its 21-day EMA of 1.4815 as key support handle, where EUR buyers may look to take advantage.
AUD/EUR however has flirted with the lows of 0.5390 recently, and now near its 21-day EMA resistance of 0.5642.
Antipodeans recovered as risk sentiment improves
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.
