The US dollar is trading higher against all G10 currencies, though the gains remain limited, indicating a consolidative trend rather than strong momentum. The Australian dollar is under the most pressure, falling over 0.5%, largely due to perceived dovish signals from central bank commentary. In contrast, the Canadian dollar has held relatively steady, slipping less than 0.1%. Further dollar strength seems likely during early North American trading. Emerging market currencies are seeing mixed performance. 

Asia Pacific Markets

In the Asia-Pacific region, the Japanese yen came under pressure following the US's decision to double tariffs on steel and aluminum, complicating trade discussions. Japan has signaled a firm stance, refusing to compromise. The dollar dropped to a five-day low near JPY142.40 but later rebounded to around JPY143.25.
In Australia, the local dollar moved lower after the release of central bank meeting minutes revealed a dovish stance. Although the Aussie had tested resistance near $0.6500, it fell back toward $0.6450. Economic data showed stronger-than-expected Q1 inventories and a minor drag from net exports, supporting moderate growth expectations for the quarter.

European Markets

The euro rose to a six-week high near $1.1455 before retreating to the $1.1400 area, showing a volatile but generally strong trend. The eurozone's May inflation data showed softer-than-expected readings, reinforcing expectations of a pause after the next ECB rate cut. Meanwhile, Switzerland reported a slight deflation, raising speculation about a potential return to negative interest rates by the Swiss National Bank.
The British pound hit $1.3560 but retreated below $1.3515. If support at $1.3480 fails, a drop toward last week’s low near $1.3415 is possible.

American Markets

The US Dollar Index briefly dipped below prior lows before recovering close to 99.00. Market focus remains on escalating trade tensions, particularly the breakdown of the US-China truce and rising tariffs. The OECD downgraded its US growth forecast to 1.6% from 2.8%, highlighting risks tied to trade policies. April factory orders were weak, particularly in core components, and May auto sales are expected to show a back-to-back monthly decline for the first time since late 2023. Consumer demand appears to be softening, with downward revisions in Q1 GDP consumption and sluggish April retail sales underlining slower economic momentum.