The world’s largest and most important forex market had a volatile session on Tuesday, with most major currency pairs reacting sharply to news. EUR/USD turned positive above 1.0800 on the American session but ended up making further downside extending the pair’s current multi-day bearishness. At the same time, GBP/USD continued its strong start to the week, pushing higher and trading well above the 1.2900 level. In comparison, the USD/JPY saw downside pressure reassert itself following a very brief trip into fresh highs just above the 151.00 figure.
The market's focus is expected to shift toward the Reserve Bank of Australia's (RBA) Monthly CPI Indicator, as traders seek clues regarding future economic policy. Additionally, President Donald Trump-inspired World Liberty Financial (WLFI) confirmed the launch of its USD1 stablecoin, backed 1:1 with the US Dollar, adding another layer of interest to the currency markets.
Tuesday marked the end of the Greenback’s reignition. Tariff worries, along with fears over a potential US economic slowdown, added to the uncertainty. This time the pause brought some rewards with a recovery in all the currencies closely linked with risk appetite. At the same time, WTI prices were unable to keep their initial gains, retreating below $69.00 again on persistent supply worries.
On the European side of the pond, European Central Bank speaker Cipollone is slated to speak – possibly swaying the direction of market sentiment. The gloomy US Consumer Confidence figures put a damper on demand for the USD. In turn, some of the key currency pairs were able to stay afloat. The Core Personal Consumption Expenditures (PCE), the Fed’s favored inflation measure, is expected later this week.
Adding to the complexity of the market, disappointing consumer sentiment data for March and New Home Sales figures from the US have weighed on the USD. Seizing the opportunity The bullish spell for AUD/USD has taken a firm hold. Now it has blown through the 0.6300 level and into three-day highs.
DXY gave divergent signals as it broke through the key support area at 104.00. All that happened after it gave up some of its longer-term bounce, driven in large part by US yields moving around.
As analysts try to get a read on where the US economy is headed, business and consumer surveys continue to be a key cog in the wheel. As the tug of war persists between positive economic data and negative sentiment indicators, economic market participants are still left to wade through the chaos.