The US dollar index fights the $100 mark, and this week's "Super Week" attacks

On the Asian session on Monday, the US dollar index fluctuated narrowly, the US dollar climbed last Friday, and ushered in its first weekly rise since mid-March. Last week, there were conflicting signs about whether tariff tensions tended to ease, causing the US dollar to fluctuate. This week, non-farm data will be welcomed. In terms of uncertainty in tariffs, non-farm has become an important data that reflects the impact of the US economy by tariffs. The focus will be on the difference in retail sales in the UK in April; Canada holds federal elections; the European Central Bank Management Committee Rennes delivered a speech; the United Nations Economic and Social Council annual meeting, during which high-level special meetings will be held with the World Bank, the IMF, the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD) until April 29.

Analysis of major currencies

Dollar: As of press time, the US dollar index hovered around 99.64, and fundamentals may be the main driver of the US dollar in the near future, especially the change in attitude of US President Trump. U.S. Treasury Secretary Bescent commented that trade tensions with other economies could ease, adding that tariffs would be significantly lowered if a trade deal was reached with other economies, which was also confirmed by Trump. Furthermore, the U.S. president no longer attacks Fed Chairman Powell, which eases pressure on the Fed's interest rate cuts, which may allow it to play a supporting role in the U.S. dollar. Technically, the U.S. dollar index trades on a stronger foundation around 99.65, but the technical outlook remains fragile. The relative strength index (RSI) of 37.10 and the moving average convergence divergence (MACD) both indicate that the upward momentum is weakening. While MACD continues to send a sell signal, the average direction index (ADX) at 54.53 indicates a strong trend but mayIt's exhausting. Short-term and long-term moving averages reinforce the bearish position. The 10-day exponential moving average (EMA) is 99.93, and the 30-day EMA is 101.80, both higher than the current price level.

Euro: As of press time, the euro/dollar hovers around 1.1357, and the euro zone economic data will be a key factor in the direction of the euro. The market is concerned about the initial HICP inflation rate in April, which, if slowed down, could lead to a lower euro as the slowdown could strengthen market expectations for the ECB rate cut. On the other hand, if initial GDP growth accelerates in the first quarter, showing another month-on-month growth, it may provide support for the euro, as market concerns about the eurozone economy likely to fall into recession may ease. Technically, the overall situation remains optimistic. The 20-day, 100-day and 200-day simple moving averages all point above, supporting a sustained bullish trend. Short-term indicators such as the 10-day exponential moving average and the 30-day exponential moving average also reinforce this prospect, suggesting that a pullback may find support.

GBP: As of press time, GBP/USD is hovering around 1.3296, and the market is paying attention to the ongoing negotiations between the UK and the United States. The UK seems willing to lower tariffs and non-tariff barriers for US products to enter the UK market. If a possible trade agreement can reduce US tariffs on UK products, it may provide some support for the pound. On the other side of the English Channel, it is reported that the British government is about to reach a new defense agreement with the EU. If so, this issue may support the pound. Overall, the market believes that any improvement in the UK-EU relations will benefit the pound. Technically, the GBP/USD remains upward tilt, but appears to be ready to fall below the key support level 1.3300 in the short term. The Relative Strength Index (RSI) shows that sellers are gathering strength, although the RSI remains bullish. However, the buyer failed to decisively break through 1.3400, exacerbating the decline of GBP/USD toward key support levels. The next support level for the pair will be the 50-day simple moving average (SMA) 1.3238, followed by 1.3200. Conversely, if the buyer pushes GBP/USD over 1.3350, it is expected to retest 1.34.

Summary of news from foreign exchange market

1. Trump tariffs hit U.S. freight volume, and rating agencies lowered U.S. port outlook to negative

For U.S. ports, this is probably not a good sign for U.S. ports: Moody's recent research report recently lowered U.S. port outlook from "stable to "negative". The agency predicts that under the current tightening of global trade, U.S. container throughput will drop sharply against the current backdrop of tightening global trade. Data released by international institutions and professional shipping agencies are not optimistic about the current outlook for U.S. freight volume. The World Trade Organization (WTO) stated in its latest Global Trade Outlook and Statistics report that after adjusting the baseline forecast to take into account the impact of recently announced tariffs and trade policy uncertainties, North America is expected to decline particularly in terms of commodity trade volume, and exports are expected to fall by 12.6% this year (formerlyThe value was 2.2% higher), and imports fell by 9.6%.

2. Source: The ECB set up a task force to simplify banking rules

A person familiar with the matter said on Saturday that the ECB has set up a task force led by Deputy Governor Kindos, which will seek ways to simplify banking rules in Europe. The source said central bank governors in Germany, France, Italy and Finland were also involved in the working group. However, the ECB has no authority to amend the rules - this is a privilege of the European legislature in Brussels, so any recommendations of the Task Force need to be submitted to Brussels for consideration. It is reported that the action originated from a letter jointly signed by the governors of the central banks of Germany, France, Italy and Spain to the European Commission this year, calling for simplification of the "overly complex" European banking rules.

3. It is said that the ECB generally tends to support another rate cut in June. Sources said that the ECB decision-makers are increasingly confident that they will cut interest rates in June in response to the continued decline in inflation, but will not make a significant rate cut. Last week, several ECB Management Committees attended the spring annual meeting between the International Monetary Fund and the World Bank, talking about the possibility of deterioration in the euro zone and the global economy due to U.S. tariffs. At the same time, the latest economic data released in the euro zone also reflects relevant phenomena. As for inflation, there is no indication that it has deteriorated due to tariffs. Sources said that more ECB Management Committee believes that it is more appropriate to make the eighth consecutive interest rate cut of 0.25% when interest rates are negotiated on June 4. The European Central Bank will also announce the latest economic forecast on the same day. However, ECB officials remain open and will make a final decision based on the data released next month.

4. South Korea's Bank of Korea Governor Lee Changyong: South Korea's policy interest rates are on the decline

According to Yonhap News Agency, South Korea's Bank of Korea Governor Lee Changyong said that although monetary policy remains cautious, the key interest rates of the Bank of Korea will fall due to stable inflation. Yonhap News Agency quoted Lee Changyong as saying to reporters when attending the International Monetary Fund (IMF) annual meeting in Washington, saying that the adjustment of the time and speed of the easing cycle does not mean that interest rates will not be lowered. He also said that the Bank of Korea may again lower its economic growth expectations this year after the economic contraction in the first quarter, but did not specify it. The bank has lowered its forecasts several times, the most recent cut to 1.5% in 2025.

5. Federal Reserve Financial Stability Report: Global Trade War and Policy Uncertainty are the biggest risks of financial stability

The latest financial stability report released by the Federal Reserve on Friday showed that rising global trade risks, overall policy uncertainty and the sustainability of US debt rank first in the list of potential risks in the US financial system. This is the first time the Federal Reserve has conducted a six-year investigation into financial risks since Trump returned to the White House. 73% of respondents said global trade risks were their biggest concern, more than double the percentage reported in November. Half of the respondents believed that overall policy uncertainty was the most worrying issue, an increase from the same period last year. Investigation alsoIt was found that issues related to recent market turmoil have received more attention, with 27% of respondents worried about the operation of the U.S. Treasury market, up from 17% last fall. Foreign divestment of U.S. assets and the value of the dollar are also rising on the list of concerns.

Institutional View

1. UBS: The market bets Trump, the Federal Reserve rescues the market and reiterates the S&P 500 end-of-year target of 5,800 points. UBS said that the current market idea is consistent with the bank's basic forecast, that is, for the rest of the year, tariffs will be lowered from the current announced levels, and the Federal Reserve will further cut interest rates this year. However, as uncertainties in trade, economy and Fed policy remain high, volatility is expected to remain high. However, UBS believes that the U.S. stock market is attractive, and the S&P 500 index will continue to look at 5,800 points by the end of the year. UBS's basic forecast is that the Fed will cut interest rates by 75 to 100 basis points this year, but in the short term, the Fed's policy resilience appears to be more limited as it must balance economic growth concerns with the risk of inflation recovery.

2. JPMorgan Chase survey: The United States may experience stagflation in the next year and investors are generally not optimistic about the US dollar.

A survey results released by JPMorgan Chase on Friday showed that the risk of stagflation in the US economy in the next year is far higher than recession, and the most optimistic asset class in 2025 is cash. Most believe that the trade war initiated by the Trump-led U.S. administration has had the worst negative impact on the U.S. economy. Three-fifths of respondents believe that U.S. economic growth will stagnate, inflation will remain above the Fed's 2% target, and one-fifths expect inflation to exceed 3.5%. Respondents also reached a consensus on the weakness of the US dollar, with most respondents expecting the euro EUR= to reach or exceed US$1.11 or higher by the end of the year, and the US dollar depreciates at least 8% this year. JPMorgan said it is worth noting that U.S. investors and global investors have different views on the consequences of the U.S. regime change and market impact. The yield on the 10-year U.S. Treasury bond is not expected to drop significantly from the current level, and more than half of respondents believe that by the end of 2025, the Treasury bond yield of the indicator will reach 4.25% or above. Nearly half of respondents expect Brent oil prices to stabilize around $66 a barrel, and 30% expect oil prices to fall below $60 or below. 13% of investors believe that emerging market stocks will perform better than other asset classes, while 9% of investors believe that developed countries will perform better than other asset classes. 57% of respondents expect Wall Street stocks to be the asset class with the worst capital outflow this year.

3. Goldman Sachs: It is expected that the US dollar/Japanese yen will fall to 135 in the next 12 months

Goldman Sachs strategists said that the yen is a good currency to hedge the Australian dollar in the short term and long-term hedge against the risks of the US dollar. Strategists Karen Reichgott Fishman and Stuart Jenkins wrote in a note on Thursday that the U.S. dollar/yen should fall to 135 in the next 12 months, with risks skewingIt is reached "early" or lower.

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