The U.S. dollar has begun the week on a stable note, recovering from recent lows, as markets anticipate a week filled with significant economic data and corporate earnings reports.
Dollar Stabilizes Amid Trade Developments
After hitting a three-year low last week, the U.S. dollar index (DXY) has found support, trading at 99.792. This rebound follows reports that China is considering suspending tariffs on certain U.S. goods, including medical equipment and industrial chemicals, which has renewed hopes for de-escalation in the ongoing trade dispute. However, conflicting statements from U.S. President Donald Trump and Chinese officials have left investors cautious. Treasury Secretary Scott Bessent’s comments denying active tariff talks have added to the uncertainty .
Euro and Pound Show Resilience
The euro remains steady against the dollar, holding at $1.1375, as investors await the Euro Area’s first-quarter GDP report, expected to show 0.2% growth. A positive outcome could bolster the euro by reducing expectations for further European Central Bank rate cuts. Similarly, the British pound has found limited support from stronger-than-expected UK retail sales data but still declined 0.22% against the U.S. dollar, trading at $1.3309 .
Australian Dollar Faces Pressure
The Australian dollar’s recovery is stalling after touching four-month highs last week. Upcoming Australian economic data, including the Consumer Price Index (CPI), could spark volatility. The Reserve Bank of Australia has pledged to base future decisions on data and risk assessments, with forecasts suggesting a 2.2% rise in annualized inflation, down from 2.4% in the previous month. A softer CPI outcome could prompt the RBA to further unwind restrictive measures, weighing on AUD sentiment.
Key Economic Data and Earnings Reports Ahead
This week is packed with economic news and corporate earnings that could influence currency markets:
- Monday: Canada’s federal election, a key political event that could ripple across North American markets.
- Tuesday: Economic releases, including the EU’s economic sentiment indicator, the U.S. goods trade balance, wholesale and retail inventories, CB consumer confidence, and the JOLTS job openings report.
- Wednesday: Japanese industrial production and retail sales, Australia’s CPI release, Chinese NBS and Caixin manufacturing PMIs, UK nationwide housing prices, and the Euro Area’s first-quarter GDP growth reading. In the U.S., attention will focus on the ADP employment change report, GDP growth figures, the core PCE price index, and personal income and spending data. Corporate earnings include reports from Meta Platforms, Microsoft, Visa, and Mastercard.
- Thursday: Australia’s balance of trade numbers and the Bank of Japan’s interest rate decision, coupled with Japanese consumer confidence data. In the U.S., initial jobless claims and the ISM manufacturing PMI will provide fresh indicators of labor market and industrial health. After the U.S. session closes, earnings reports from Apple and Amazon will be in sharp focus.
- Friday: Inflation data from South Korea and Australia, alongside Australian retail sales figures. In Europe, the Euro Area’s CPI and unemployment data will be released, while in the U.S., the highly anticipated April nonfarm payroll report, average hourly earnings, and the unemployment rate are due at 8:30 a.m. ET.
As the week progresses, markets will closely monitor these developments to gauge the direction of currency markets and potential shifts in monetary policy.
