Aussie, kiwi lose momentum
The US dollar was stronger on Monday after weekend news the US delegation to Iran peace talks would delay travel to Pakistan while waiting for further response from Iran.
The USD/SGD gained 0.2% as it neared two-week highs while USD/CNH gained 0.1%. USD/HKD eased.
The Australian and New Zealand dollars extended a loss of momentum seen last week as markets largely marked time. Last week, trading volumes were light, positioning barely shifted, and volatility continued to ease.
Equity market volatility, as measured by the VIX, slipped back below 20, returning to levels seen before the Middle East conflict escalated.
Markets appear increasingly comfortable with oil holding around USD100 a barrel and with the risk of further tensions in the region. While this calm has helped support broader risk sentiment, there remains the risk of complacency.
Recent economic data continues to reinforce a familiar story. Since 2022, the US economy has consistently outperformed its peers, and that divergence has become even clearer over recent weeks. Incoming data has been firmer in the US, while growth elsewhere remains more mixed, reinforcing the relative resilience of US demand and activity. Last week’s purchasing manager index (PMI) highlighted this story.
Overall, markets are steady rather than confident. Low volatility and narrow ranges suggest investors are happy to wait for clearer signals, either from geopolitics or from the next decisive shift in economic data, before committing to a stronger directional view.
USD/JPY holds near a two-week high, 160.00 in focus
Japan’s inflation ticked higher in March, but it still falls short of convincing the Bank of Japan.
Headline inflation rose to 1.5% year on year from 1.3% in February. Core inflation, which excludes fresh food, climbed to 1.8% from 1.6%, staying below the central bank’s 2% target for a second straight month.
Government fuel subsidies are helping soften the impact of higher energy costs linked to the Iran conflict. As those costs spread through the economy, inflation could move back above 2% later this year.
For now, the Bank of Japan is expected to keep its policy rate unchanged at 0.75% at its April 27–28 meeting. Reuters reported on Thursday that the central bank plans to cut its fiscal 2026 growth forecasts while raising its inflation projections.
Market is currently pricing in 94% likelihood that BoJ will hike in July meeting.
In FX, USD/JPY is trading near a two‑week high. The pair is down about 0.4% from its late‑March peak near 160.46 and is hovering around the 160.00 area.
Buying interest is seen near 21-day EMA of 159.15 and again around 50-day EMA of 158.35. A firm break above 160.00 could open the way toward 162.00 region.
Central banks in focus with Fed, BoJ, and ECB all due
The week delivers a massive five major monetary policy announcements. Following the Bank of Japan on Tuesday, the Bank of Canada follows late Wednesday.
A monumental Thursday will dominate FX markets with consecutive rate decisions from the US Federal Reserve, the Bank of England, and the European Central Bank, promising significant volatility.
Global price pressures remain centre stage. Wednesday features Australia’s CPI alongside preliminary inflation data from Germany. On Thursday, flash Eurozone CPI will be released, followed closely by the US PCE Price Index—the Fed’s preferred inflation gauge—vital for charting the US dollar’s near-term trajectory.
Complementing the rate and inflation data are key global growth and employment metrics. Thursday provides a health check with China’s Manufacturing PMI and Eurozone Q1 GDP. Friday caps off the week with critical US data: the ISM Manufacturing PMI report.
Aussie, kiwi both turn negative over last seven days
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 27 April – 1 May
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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.
