USD/JPY – Yen Slides as Ueda Says No Plans for Policy Shift

Bank of Japan Governor Ueda spoke at his first news conference as head of the central bank today. It wasn’t quite a State of the Union address, but Ueda’s message was clear – the current monetary policy was appropriate and he had no plans to make any major shifts.

Solid US Jobs Growth Supports May Hike from Fed

NY Fed's consumers' 1y inflation expectations ticked even higher in March to 4.7% (Feb 4.2%), which together with the resilient labour markets continues to support our base case for one more 25bp Fed hike at the May meeting.

EUR/USD Should Soon Finds Its Way Back Above 1.09

In case equity sentiment holds up, EUR/USD should soon finds its way back above 1.09. The 1.0973 April high serves as the first meaningful resistance.

USD/CAD Steady, Bank of Canada Expected to Pause Again

The Canadian dollar is almost unchanged, trading at 1.3501 in Europe. With no Canadian events and no tier-1 releases out of the US, we can expect a quiet day for USD/CAD. The markets will be listening closely as Fed members Goolsbee, Harker and Kashkari will speak. Wednesday should be much busier for the Canadian dollar, with key releases in both Canada and the US. The Bank of Canada will make a rate announcement and the US releases the inflation report for March.

Chinese Disinflation

Consumer inflation in China fell to 0.7% YoY in March from 1.0% in the previous month. Last month’s producer price index was 2.5% lower than a year earlier, accelerating its decline from 1.4% in February.

Sunset Market Commentary

Key European stock indices gain 0.5% to 1% today with the EuroStoxx50 for example testing the YTD top at 4347. Sentiment is dwindling going into the start of US trading though.

Australian Dollar Edges Higher as Consumer Sentiment Soars

The Australian dollar has posted slight gains today. In the North American session, AUD/USD is trading at 0.6653, up 0.18%.

Japan Recovering, But What About Yen?

After last year’s shock, Japan’s economic indicators are slowly returning to normal. But conditions are still unsuitable for raising interest rates for the Bank of Japan. This is not good news for the Yen. The interest rate differential, which has risen sharply over the past year, creates the conditions for carry trade. The only obstacle to an active interest rate differential play is the uncertainty surrounding monetary policy due to the change in the central bank governor.

Forex and Cryptocurrency Forecast

Last week passed without sharp jumps. The dollar continued to fall in price, and EUR/USD returned by March 30 to where it was traded seven days before. The local maximum was fixed at 1.0925, and the five-day period finished at 1.0842.

AUD/USD – Aussie on the Move, RBA Expected to Pause Rates

The Australian dollar has edged higher at the start of the week. In the European session, AUD/USD is trading at 0.6715, up 0.45%. The RBA meets on Tuesday (Australia time) and is expected to pause rates. The US releases ISM Manufacturing PMI, which is expected to record another decline.