SINGAPORE (Reuters) — The dollar (DX=F) made a steady start on Monday as investors prepared for a week packed with economic data that may offer the first glimpse into whether U.S. President Donald Trump’s trade war is beginning to take a toll.
At 143.57 yen and $1.1360 per euro, the greenback has, for now, found a footing, while still tracking toward its largest monthly fall in nearly 2-1/2 years as Trump’s tariff policies continue to rattle global confidence in U.S. assets.
The dollar has fallen more than 4% against both the euro and the yen in April but managed a modest bounce at the end of last week following signs of a more conciliatory tone between the U.S. and China.
Last week, both sides appeared to step back from escalation, with the Trump administration hinting at potential tariff reductions and China exempting select U.S. imports from its 125% levies. However, while Trump claimed progress and conversations with President Xi Jinping, Beijing has publicly denied that formal trade talks are taking place.
Treasury Secretary Scott Bessent also refrained from confirming the existence of active tariff discussions during a Sunday interview.
“The next big chapter here will be whether all this volatility has hit real-world decisions — especially in the U.S. jobs market,” said ING’s global head of markets, Chris Turner.
Investors now await a crucial slate of U.S. economic data, headlined by April’s non-farm payrolls report due Friday. A significant slowdown in hiring is widely anticipated, which could further dent sentiment.
Also on deck are the first-quarter GDP figures and the Federal Reserve’s preferred inflation gauge, the core personal consumption expenditures (PCE) index. Across the Atlantic, GDP and preliminary inflation figures will also be released in Europe, adding to a pivotal week for global markets.
In the Asia-Pacific region, an Australian inflation reading scheduled for Wednesday is unlikely to deter a widely expected rate cut next month. The Australian dollar remained near recent highs, trading just below $0.64 early Monday. Similarly, the New Zealand dollar hovered just shy of $0.60.
“AUD/USD could trade above resistance at 0.6464, but it has been a strong resistance level this month,” said Commonwealth Bank of Australia strategist Joe Capurso in a client note.
Meanwhile, Canada holds its national election Monday, with Prime Minister Justin Trudeau’s Liberal Party narrowly ahead in polling. Despite the political uncertainty, the Canadian dollar remained stable at C$1.3874 per U.S. dollar, with options markets indicating low expectations for currency volatility.
Elsewhere, the Bank of Japan is set to announce its monetary policy decision on Thursday. No major policy changes are expected, but investors will be paying close attention to how Japanese officials plan to navigate growing economic uncertainties, particularly amid ongoing U.S.-Japan trade discussions likely to address currency matters.
