Concerns about the US credit market have eased further since the weekend, prompting a hawkish repricing in the Fed curve and justifying a stronger dollar. EUR/USD may slip all the way to 1.160 in the next few days, but it may require a hot US CPI print to extend the drop. Elsewhere, Japan’s new PM Takaichi was confirmed by parliament this morning
As the USD shed some post-Fed gains at the start of this week, the Canadian dollar again stood out as an underperformer. The worsening jobs market, trade uncertainty and possibility of more Bank of Canada rate cuts should keep weighing on CAD against the rest of G10, in our view. Today is PMI day, with central bank speakers (including Powell) still in focus
Quiet start to Tuesday with G10 FX trading in tight ranges against the USD, US equity futures flat while USTs are weaker, led by the back-end. Reports suggest that India could cut its tariffs on US imports to avoid April 2 measures, following Trump's headlines on Monday on a potentially softened and/or targeted approach.
