The US dollar continues to strengthen against the G10 currencies, with the greenback maintaining its gains amid quiet trading conditions. There are still mixed signals regarding the US tariffs expected for next week, with President Trump confirming auto tariffs are imminent, though some carve-outs might be possible. The US Commerce Secretary is meeting with the EU’s trade representative, and a US delegation is also in India to discuss trade. Against emerging market currencies, the dollar showed mixed results. Notably, the offshore yuan fell for the sixth consecutive session, its longest losing streak in about two and a half years, while the Mexican peso strengthened by 1% against the greenback.

Asia Pacific Markets

In the Asia Pacific region, the dollar saw significant movement against the Chinese yuan, reaching a two-week high.
Meanwhile, the Japanese yen has been under pressure, with the dollar surpassing JPY150 for the first time this month. Stronger US Treasury yields and the growing yield premium between the US and Japan have contributed to this trend. The yen remains vulnerable to further US dollar strength, especially with upcoming inflation data from Tokyo.

European Markets

In Europe, the euro faced selling pressure, reaching a two-week low against the US dollar. A break of the $1.0780 level could target further declines towards the $1.0700 area. Speculators were net long on euros in the futures market for the second consecutive week, showing a shift from a net short position held since last October. On the economic front, Germany's IFO business sentiment index showed modest improvement, reflecting a better outlook among surveyed companies.
Meanwhile, the British pound remained subdued after a failed attempt to break above $1.30, hovering within a narrow range. Key economic data, including the February CPI and updates on fiscal policy, are expected to influence the pound's next move.

American Markets

The US dollar index held steady after last week's pullback and saw slight gains, reflecting ongoing strength in the greenback. The DXY reached its highest close since early March, trading between 104.25 and 104.45. Despite recent mixed economic data, the dollar is supported by looming tariff threats, especially against countries involved in importing Venezuelan oil. As the US dollar strengthens, the market anticipates further moves toward higher tariffs, keeping the outlook for the greenback relatively positive. Economic data to be released today, including house prices and new home sales, will provide further insights into the US economic trajectory.