In a thinly traded market environment, the US dollar has experienced a significant drop, losing over 1% against six major G10 currencies. The Canadian dollar leads the charge, climbing nearly 0.50% to reach an eight-month high. While market conditions are undoubtedly playing a role, the dollar’s downturn appears largely driven by fresh concerns over the Federal Reserve’s independence. Additionally, early April data from South Korea show a sharp 14% plunge in exports to the US, amplifying the bearish sentiment. With major financial hubs like Hong Kong and much of Europe closed for Easter, the low liquidity likely intensified these moves, although the trend remains clearly against the greenback.

Asia Pacific Markets

In Asia, the Japanese yen and Australian dollar have both gained strength as the dollar continues to retreat. The yen dropped to a new yearly low near JPY140.50, with expectations that last year’s bottom around JPY139.60 could be next. Japan faces economic struggles, with back-to-back weak PMI readings and a sharp rise in Tokyo’s inflation—potential signs of stagflation.
Meanwhile, the Australian dollar has broken through resistance at $0.6400, reaching $0.6435 amid broad dollar weakness. Traders are watching for Australia's upcoming preliminary PMI and CPI data, while speculation surrounds the Reserve Bank of Australia’s next move—most likely a modest rate cut.

European Markets

European currencies are advancing as the dollar weakens. The euro has broken out of a recent consolidation phase and surged toward $1.1575 after consistently testing the $1.14 level in previous sessions. Despite many markets being closed for Easter, attention is turning to Wednesday’s PMI data, though it’s unlikely to shift expectations of a European Central Bank rate cut in June.
Meanwhile, the British pound continues its upward run, marking a tenth consecutive daily gain. The strength is more about dollar softness than any fresh optimism around the UK economy.

American Markets

US financial markets have seen some stabilization, but the dollar remains under pressure. The Dollar Index has slipped to the 98.00 mark—a fresh three-year low—with limited technical support until the 95.00 area. The slide comes amid renewed threats to the Federal Reserve’s independence and signs of tariff-related strain in trade data. Although some high-frequency indicators may not influence short-term policy decisions, expectations are rising for a potential rate cut in early summer. Fed Chair Powell’s recent comments and the upcoming Beige Book report suggest more attention is being given to longer-term outlooks, reinforcing speculation that easing could come sooner rather than later.