The US dollar is trading in a mixed and restrained manner, mainly within the ranges observed at the end of last week. This week could become a turning point, as the expected weak Q1 GDP figures may reveal a stagnating economy even before the impact of new tariffs. Additionally, employment growth is anticipated to show signs of slowing. As President Trump approaches the 100th day of his second term, tensions rise over new tariffs and conflicting reports about US-China trade talks, with many believing Beijing's version.

Asia Pacific Markets

In Japan, the dollar climbed to a nine-day high above JPY144.00, nearing a significant retracement level. Economic data, including expected declines in retail sales and industrial production, highlight Japan’s ongoing stagflation challenges. The Bank of Japan is not expected to adjust rates during its May 1 meeting but will likely revise its growth and inflation outlook downward.
Meanwhile, in Australia, after a brief rally, the Australian dollar reversed course, facing downside pressure. Traders are watching upcoming CPI, trade, and retail sales data ahead of the national election on May 5.

European Markets

The euro's rally to nearly $1.1575 last week lost momentum, with the currency stabilizing between $1.1330 and $1.1385. Eurozone’s economic highlights this week include Q1 GDP data and preliminary April CPI, with inflation expected to hold steady, potentially leaving room for further ECB rate cuts.
Sterling, on the other hand, tested highs near $1.3345 before retreating slightly. The British pound remains resilient, but signs of consolidation are emerging. UK markets brace for light economic data ahead of the May 8 Bank of England meeting, where a rate cut is widely anticipated.

American Markets

The Dollar Index continues to hover near its lows, spending over a week beneath the 100.00 threshold. Caution is advised. A close above 100.00 could prompt a short-covering rally. Attention this week focuses on the Dallas manufacturing survey, Q1 GDP data, and Friday’s employment report. Forecasts predict a near-stagnant GDP and slower job growth, with payrolls expected to rise by just 130,000. Inflation metrics are also in focus, with CPI and PPI figures anticipated to decline, while the PCE deflator is likely to show moderated gains, reflecting underlying economic softness ahead of next week’s FOMC meeting.