EUROPEAN FX UPDATE: DXY on the backfoot once again and G10s broadly supported with newsflow on the quiet end

USD: DXY -0.4%; 99.47

• Another downbeat session for the Dollar following Friday's choppy session which ultimately saw the index print a range between 100.63 and 99.02, before closing at 99.79.


• Price action this morning has been rather horizontal amid eerily quiet newsflow.


• The usual positive link between US Treasury yields and the dollar broke down, reminiscent of rare stress periods, according to desks.


• US trade policy continues to appear disorderly, with temporary exemptions for some Chinese electronic exports (about 20% of China's exports to the US) followed by expectations of new tariffs on semiconductors and potentially pharma over the next month or two.


• Most of last week’s USD weakness was driven by buy-side flows, confirmed by CFTC futures data, according to some desks.


• From a technical perspective, "DXY did some serious damage to the longer-term charts last week, and we imagine DXY sellers will re-appear in the 100.50/75 area if the near-term bear trend remains", according to ING.


• DXY resides in a current 99.20-99.91 range, well within Friday's parameter.


• Today's session is relatively thin in terms of scheduled events/data but speakers include Fed's Barkin (2027 voter) & Waller (voter).

EUR: EUR/USD +0.2%; 1.1386

• Modestly firmer this morning as a function of the softer Dollar coupled with some reprieve from US President Trump classifying semiconductor tariffs under a separate basket instead of reciprocal tariffs.


• ING suggests market participants may be positioning for the tariff shock to materialise in US data before extending bullish bets, whilst EUR/USD is likely to be caught between a US-driven trend change and a dovish ECB stance in the near term.


• EUR/USD resides in a current 1.1280-1.1424 range and well within the 1.1188-1.1473 parameter set on Friday.

JPY: USD/JPY -0.3%; 143.06

• USD/JPY retreated to a sub-143.00 level owing to the weaker dollar and in a continuation of last week's downward bias, but is off worst levels given the broad positive risk environment across Asia-Pac and then Europe.


• JPY gains are modest at the time of writing, and newsflow is on the quieter side with no commentary from major economies on US trade policy.


• USD/JPY trades within a 142.23-144.30 range, contained in Friday's 142.05-144.60 parameters.

GBP: GBP/USD +0.6%; 1.3163

• Again, posting gains as a function of the Dollar, with Cable rising to an overnight peak of 1.3174 as it eyes the peak from the 3rd of April at 1.3207.


• UK-specific drivers have been light thus far with some focus on tomorrow's UK labour market data, then inflation on Wednesday.


• Aside from that, macro impulse will likely come from the developing trade saga.

Antipodeans: AUD/USD +0.3%; 0.6334. NZD/USD +0.8%; 0.5882

• Gains across the antipodeans amid the broader constructive tone across the markets after US President Trump watered down his semiconductor tariffs, clarifying that it is separate from the basket of reciprocal tariffs.


• Aussie continues to be slightly more restricted than the Kiwi, with sub-par Chinese import data overnight likely hampering gains.


• AUD/USD resides in a 0.6276-0.6336 range, and NZD/USD trades in a 0.5821-0.5888 parameter.

14 Apr 2025 - 09:50- ForexEU Research- Source: Newsquawk