Scaling your business internationally offers enormous growth potential, but the prospect of expanding into new markets can be so enticing that it’s easy to lose track of the nuances. Overlooking a critical step, like simple and efficient international payments, may lead to dire consequences.
Noncompliance, payment delays, and failure to meet regulatory requirements can be extremely costly, putting the whole endeavor at risk.
Executing transactions is far more complex than simply transferring funds across borders. This is why companies of all sizes should consider partnering with an established cross border payments specialist when expanding internationally.
“Businesses that operate across borders need peace of mind that payments will be delivered accurately and on time, every time,” says Frederic Simon, Head of Global B2B, and CEO of Convera Europe, S.A. “Reliable international payments, regulatory expertise and cost-effective, tailored FX solutions play a fundamental role in ensuring you succeed at scaling internationally.”
How to choose a strategic payments partner
The choice of B2B payment provider, the integration of fintech innovations and the way these solutions address compliance, security, and efficiency can significantly impact a company’s growth prospects in the global marketplace.
Success in today’s global payments ecosystem goes hand in hand with an expansive global financial network, a commitment to compliance, market insights expertise, currency risk specialists, seamless ERP integrations, and the APIs of a fintech.
Strategic partnerships with fintech providers utilizing the latest technology can significantly enhance a business’s global operations, ensuring greater efficiency, lower transaction costs and higher security, essentially making payments a strategic asset for international growth.
Key factors to consider when evaluating potential cross border payments partners
Reliable international payments play a fundamental role in ensuring you develop strong relationships with customers, suppliers, partners and even employees, which are all vital to the success of a business.
At the same time, companies must ensure that international payment processes don’t eat up resources or impact cash flow.
Here are a few points to keep in mind:
Currency fluctuation
Managing the fluctuations in relative monetary value is one of the trickiest aspects of scaling an international business; however, it can also be an advantage. Partner with an expert who not only monitors daily shifts in the global marketplace but also enacts a strategy that can help you withstand currency fluctuations.
A reputable provider should have a broad network of banking — and nontraditional financial — partners worldwide and the ability to make efficient global payments seem like simple local payments.
Compliance
Ensure the provider has a solid understanding of global — and local — regulatory standards and offers compliance tools to help protect your business. Licensed partners can manage a comprehensive and pressure-tested global risk and compliance program that holistically addresses potential risks such as money laundering, terrorist financing, fraud, sanctions, and other misconduct.
Platform integration
Your partner’s payment solution should be compatible with a wide range of accounting and ERP platforms. To help you scale overseas, these insights will seamlessly save time and resources when managing remittance, refunds, and cash flow forecasting.
Transparency
Opt for a provider who is upfront about transaction fees, costs, and timelines, ensuring there are no hidden surprises.
Reputation
Research the provider’s track record in the fintech space and seek testimonials or reviews from other businesses that have successfully implemented similar B2B cross-border payment solutions.
Accelerating business growth with international payments
By selecting the right cross border payments partner, businesses can unlock new global revenue streams, optimize transaction approval rates and provide secure, transparent payment solutions to customers and contractors. Whether it’s managing currency fluctuations, ensuring compliance or adhering to regulations, experts in the field can offer businesses a powerful tool to future-proof your global operations and accelerate growth.
When executed with the help of an experienced and innovative partner, these modern transactions also go a long way toward building relationships with customers, suppliers, partners and employees.
“There’s a lot to consider when choosing the right payments partner for your business,” Frederic explains. “But when you make a leap from traditional banking to an innovative cross-border payment provider — such as Convera — you’re adopting a powerful tool for long-term growth.”
Each cross-border payment represents more than just a transaction. It’s an opportunity to drive growth, reduce costs, and strengthen business relationships — all critical steps in scaling a business internationally.
Make sure to partner with a dedicated and forward-thinking payment provider that can help you navigate the nuances of the global economy and hit your cross-border growth targets.
Want more insights on the topics shaping the future of cross-border payments? Tune in toConverge, with new episodes every Wednesday.
Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
USD lower ahead of corporate earnings deluge
The US dollar was lower on Monday with markets on edge ahead of the busiest week of corporate earnings from US companies. The Australian dollar gained strongly.
More than a third of the S&P 500 will report this week including four of the so-called “Magnificent Seven” – Microsoft, Meta, Amazon and Apple.
Financial markets will not be necessarily focused on the results. Instead, the company forecasts, including the likely impact of tariffs, will be key.
The US dollar weakened ahead of the results with the biggest gains seen in GBP/USD, up 0.9%.
The AUD/USD climbed 0.5% as the pair returned to four-month highs. The NZD/USD gained 0.2%. The USD/SGD fell 0.5% while USD/CNH lost 0.2%.
ECB’s Kazaks warns against rate cuts
According to Bloomberg, Martins Kazaks, a member of the Governing Council, stated that the ECB should only cut rates to an “accommodation” level if the economic outlook significantly worsens.
Kazaks stated over the weekend in Washington, where he attended the IMF’s spring meetings, that while US tariff policies may slow down inflation and even trigger a recession, there is little indication of what will happen next and reducing too much would waste policy space.
“The question is more about whether we will have to go much lower below 2.00%, but we are at 2.25%,” he stated. “If it’s necessary, we’ll do it, but in order to do so and further reduce inflation, the state of the economy would need to deteriorate.”
EUR/USD has recently corrected from short-term highs. From here, the 21-day EMA support of 1.1219 will be crucial for EUR/USD.
In EUR/SGD, 21-day EMA support of 1.4827 will be key support for EUR/SGD.
AUD/EUR next key resistance is its 21-day EMA of 0.5640, and 50-day EMA of 0.5746 next.
US made no reference to FX levels, USD/JPY to rise?
According to Atsushi Mimura, Japan’s vice finance minister for international affairs, the US made no reference to FX levels during the bilateral meeting in Washington.
“As we have said, the U.S. side did not touch upon exchange-rate targets in the finance minister talks.”
Looking at the chart, there’s a stark dichotomy between the USD/JPY and the US 10-year bond yield.
USD/JPY is climbing back up to its key 21-day EMA of 144.51, and the next key resistance will be 50-day EMA of 147.12, where USD buyers may look take advantage now.
Aussie back near four-month highs
Table: seven-day rolling currency trends and trading ranges
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
After four straight weeks of heavy selling, the dollar finally found some footing. The rebound came as President Trump softened his tone — easing trade rhetoric, backing Fed independence, and signaling no plans to remove Chair Jerome Powell. Markets also took comfort from early signs that tensions with China might cool. Combined with deeply bearish USD sentiment and strong month-end rebalancing flows, the greenback finally caught a much-needed bid.
Meanwhile, bond market volatility has been extreme. Just three weeks ago, the 30-year Treasury yield ended the week at 4.41%; two trading sessions later, it spiked to 5%. In the meantime, the VIX touched 60, and bonds still couldn’t find a bid — highlighting the depth of market stress. By last week, yields had settled at 4.72%, but not before a 16-year duration Treasury had lost roughly 12% in just a few days — a brutal reminder of how sensitive long bonds are to yield shifts. The VIX also eased back to 24.8, displaying some relief in markets, which hardly have resolved deeper concerns.
Despite the softer tone from Washington, serious risks remain. Although reports suggested Presidents Xi and Trump were engaging in trade talks, the Chinese administration denied any imminent negotiations. Even with the April 12 exemption for computers and electronics, U.S. tariff rates remain alarmingly high — surpassing even post-Smoot-Hawley Act levels. The trade-weighted tariff rate on China, after adjustments, sits around 110%, a level that could severely disrupt, or even shut down, trade in many goods and inputs.
Looking ahead, a busy data calendar could shed light on how much damage is already done. Wednesday brings Q1 GDP and March personal income; Thursday, the March ISM manufacturing index; and Friday, the key April employment report. These releases may offer the first hard evidence of whether mounting fears are starting to hit the real economy.
GBP/USD turns at key 1.3400 level
George Vessey – Lead FX & Macro Strategist
The GBP/USD was higher last week but the sharp turn seen at the major technical level of 1.3400 means markets will be closely watching for any signs of weakness.
Tariff news took a back seat last week with markets instead focused on the renewed tension between US president Donald Trump and Federal Reserve chair Jerome Powell. Initially, worries that Trump was looking for ways to end Powell’s term saw the USD tumble, but a cooling of concerns saw the USD recover.
Technically, some momentum studies, like the relative strength index (RSI), have also suggested the GBP/USD could reverse.
Away from tariff news, key elections remain in focus this week. Notably, the Canadian national election, to be held on Monday, is expected to see a win for Mark Carney’s Liberal Party. Australia and Singapore both vote in national elections on Saturday.
ECB’s Kazaks warns against rate cuts
George Vessey – Lead FX & Macro Strategist
According to Bloomberg, Martins Kazaks, a member of the Governing Council, stated that the ECB should only cut rates to an “accommodation” level if the economic outlook significantly worsens.
Kazaks stated over the weekend in Washington, where he attended the IMF’s spring meetings, that while US tariff policies may slow down inflation and even trigger a recession, there is little indication of what will happen next and reducing too much would waste policy space.
“The question is more about whether we will have to go much lower below 2.00%, but we are at 2.25%,” he stated. “If it’s necessary, we’ll do it, but in order to do so and further reduce inflation, the state of the economy would need to deteriorate.”
EUR/USD has recently corrected from short-term highs. From here, the 21-day EMA support of 1.1219 will be crucial for EUR/USD.
GBP, euro end week lower
Table: seven-day rolling currency trends and trading ranges
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
The GBP/USD was higher last week but the sharp turn seen at the major technical level of 1.3400 means markets will be closely watching for any signs of weakness.
Tariff news took a back seat last week with markets instead focused on the renewed tension between US president Donald Trump and Federal Reserve chair Jerome Powell. Initially, worries that Trump was looking for ways to end Powell’s term saw the USD tumble, but a cooling of concerns saw the USD recover.
Technically, some momentum studies, like the relative strength index (RSI), have also suggested the GBP/USD could reverse.
Away from tariff news, key elections remain in focus this week. Notably, the Canadian national election, to be held on Monday, is expected to see a win for Mark Carney’s Liberal Party. Australia and Singapore both vote in national elections on Saturday.
ECB’s Kazaks warns against rate cuts
According to Bloomberg, Martins Kazaks, a member of the Governing Council, stated that the ECB should only cut rates to an “accommodation” level if the economic outlook significantly worsens.
Kazaks stated over the weekend in Washington, where he attended the IMF’s spring meetings, that while US tariff policies may slow down inflation and even trigger a recession, there is little indication of what will happen next and reducing too much would waste policy space.
“The question is more about whether we will have to go much lower below 2.00%, but we are at 2.25%,” he stated. “If it’s necessary, we’ll do it, but in order to do so and further reduce inflation, the state of the economy would need to deteriorate.”
EUR/USD has recently corrected from short-term highs. From here, the 21-day EMA support of 1.1219 will be crucial for EUR/USD.
All eyes on inflation and growth data this week
The upcoming week will see inflation data emerge as the central focus across major economies. In Australia, Q1 CPI figures (Wednesday) are expected to show a quarterly rise of 0.8% QoQ and 2.3% YoY, which could provide insight into the Reserve Bank of Australia’s policy trajectory.
Meanwhile, preliminary inflation readings from Germany and France (Wednesday) will offer a closer look at price pressures within the Eurozone, with Eurozone-wide CPI data due Friday. These data points will likely shape expectations around the European Central Bank’s (ECB) next moves.
Additionally, the US will release its Personal Income and Spending (Thursday) alongside the PCE price index—widely regarded as the Federal Reserve’s preferred measure of inflation. These figures will be closely monitored amidst ongoing speculation about the Fed’s future rate decisions.
Growth metrics will also be in focus. The US Q1 GDP preliminary reading (Wednesday) is expected to show annualized growth of 0.4%. The Eurozone will release Q1 GDP estimates as well. This, alongside PMI data from the manufacturing sector in US (Thursday) and across Europe (Friday), will offer further context on the region’s economic momentum.
The Bank of Japan (BoJ) will announce its policy decision on Thursday, with the target rate expected to remain unchanged at 0.5%.
Labour market data from the US (Friday) will be a key highlight, with nonfarm payrolls expected to rise by 123k in April, a notable slowdown from March’s strong 228k reading. The unemployment rate is forecast to hold steady at 4.2%. These figures will provide insight into the resilience of the US labour market amidst tighter monetary conditions.
The UK calendar looks light, with CBI realized sales on Monday, BRC shop price index on Tuesday and loan growth numbers due Thursday.
GBP, euro end week lower
Table: seven-day rolling currency trends and trading ranges
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Aussie lower as elections loom
The Australian dollar was lower over the long weekend ahead of a major week of Australian news that sees the key March-quarter inflation numbers due on Wednesday and the Federal election on Saturday.
The AUD/USD had climbed to four-month highs last week – in line with gains in global equity markets – but the pair eased back from these highs on Friday.
The NZD/USD was also lower on Friday as the kiwi reversed after briefly trading above 0.6000 last week for the first time since November.
Key elections remain in focus in other parts of the world with the Canadian national election to be held on Monday — and expected to see a win for Mark Carney’s Liberal Party.
The Singapore national election is due on 3 May. Lawrence Wong’s People’s Action Party is seen as likely to win.
The USD/SGD was higher on Friday with the pair near two-week highs.
China-US trade talks and China-EU partnerships
A representative for China’s Commerce Ministry stated that “any reports on development in talks are groundless” and urged the US to lift all unilateral tariffs.
US President Donald Trump claimed that his administration has been meeting with Chinese officials on trade.
President Xi Jinping is working to mend fences with the European Union in the meanwhile.
According to a European official quoted by Bloomberg, Xi is getting ready to remove penalties on a number of EU legislators, and EU authorities are thinking about removing tariffs on Chinese electric vehicles.
European leaders may talk about resurrecting an investment treaty and expanding trade with China at a conference scheduled for July in Beijing.
USD/CNH remains around 2% below its recent all-time highs of 7.4290.
USD/CNH has been sitting on support line of 50-day EMA of 7.2834, where USD buyers may look to take advantage.
The next key resistance for the pair remains key psychological level of 7.3000 and 7.3500.
All eyes on inflation and growth data this week
The upcoming week will see inflation data emerge as the central focus across major economies. In Australia, Q1 CPI figures (Wednesday) are expected to show a quarterly rise of 0.8% QoQ and 2.3% YoY, which could provide insight into the Reserve Bank of Australia’s policy trajectory.
Meanwhile, preliminary inflation readings from Germany and France (Wednesday) will offer a closer look at price pressures within the Eurozone, with Eurozone-wide CPI data due Friday. These data points will likely shape expectations around the European Central Bank’s (ECB) next moves.
Additionally, the US will release its Personal Income and Spending (Thursday) alongside the PCE price index—widely regarded as the Federal Reserve’s preferred measure of inflation. These figures will be closely monitored amidst ongoing speculation about the Fed’s future rate decisions.
Growth metrics will also be in focus. The US Q1 GDP preliminary reading (Wednesday) is expected to show annualized growth of 0.4%. The Eurozone will release Q1 GDP estimates as well. This, alongside PMI data from the manufacturing sector in US (Thursday) and across Europe (Friday), will offer further context on the region’s economic momentum.
The Bank of Japan (BoJ) will announce its policy decision on Thursday, with the target rate expected to remain unchanged at 0.5%.
Labour market data from the US (Friday) will be a key highlight, with nonfarm payrolls expected to rise by 123k in April, a notable slowdown from March’s strong 228k reading. The unemployment rate is forecast to hold steady at 4.2%. These figures will provide insight into the resilience of the US labour market amidst tighter monetary conditions.
Aussie, kiwi lower over weekend
Table: seven-day rolling currency trends and trading ranges
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
It’s been yet another topsy turvy week in financial markets, but Thursday marked a third consecutive day of risk-on trading, fuelled by dovish remarks from Fed officials and a de-escalation in Trump’s trade war. Cross-asset price movements suggested a more stable and lasting improvement in market sentiment, contrasting with the sharp, short-covering-driven rallies seen earlier in the week.
Cleveland Fed President Beth Hammack got things rolling yesterday, noting the Fed could cut rates as early as June if it has clear evidence of the economy’s direction. And that sentiment was later echoed by Governor Christopher Waller who said he’d support rate cuts if there’s a significant rise in unemployment. And in the last few hours, in a notable development, Bloomberg reported that China is considering suspending its 125% tariff on certain US imports, signalling a potential easing in trade tensions.
The S&P 500 index was able to exit correction territory, ending at least 10% above its recent low set in the wake of Trump’s April 2 “liberation day” tariffs. In the FX space, US dollar demand is picking up, whilst traditional safe havens like the yen, euro, and Swiss franc have weakened, the latter down more than 1% this week.
Recent events also underscore the bond market’s influence on President Trump’s decisions. After sharp increases in long-term yields caused market unease, Trump suspended most tariffs for 90 days. Similarly, following another yield spike after his remarks on Fed Chair Powell, he clarified he had no plans to fire Powell. These reactions suggest that significant yield rises on the long end will likely prompt mitigating actions to stabilize markets.
Canadian elections unlikely to sway the Loonie
Kevin Ford – FX & Macro Strategist
This Monday, Canadians will head to the polls to elect their next Prime Minister, a decision coming at a critical juncture for the nation. Canada is confronting one of the most significant economic threats in years. With approximately 79% of its exports destined for the U.S.—accounting for around 19% of its GDP—the country faces an elevated risk of recession if tariffs on steel, aluminum, and automobiles persist for an extended period.
Polls indicate a likely Liberal victory, despite concerns about the long-term effects of the rising debt-to-GDP ratio under their leadership. However, this is unlikely to influence the Loonie’s short-term trajectory. That said, volatility could spike if the Conservatives stage a comeback ahead of Monday’s election.
Business sentiment remains fragile, and regardless of the election outcome, the next leader will face the critical challenge of revitalizing productivity and restoring confidence in an already battered business climate.
This week, the Loonie has been buoyed by sustained dollar weakness, with the DXY index reaching its lowest level since April 2022, down 5% this month. The USD/CAD has gained 3% in April, finding support at 1.38 after five consecutive weeks of decline from 1.44. Remaining below its 200-day SMA of 1.4015, the Loonie has established strong support at 1.378 and resistance at 1.39. Current price movements suggest a medium-term rebound, possibly revisiting the upper side of the 1.373–1.40 range.
Euro quelled by risk-on mood
George Vessey – Lead FX & Macro Strategist
Despite the modest relief rally for the dollar in the wake of recent news, the $1.13 mark remains a key short-term support for EUR/USD for now. A decisive break could open the door for a bigger leg lower with the 21-day moving average, at $1.1136, another important level to decipher the short-term trend. But despite the potential for an extended pullback, longer term dynamics appear favourable with options traders betting on lasting euro strength, pointing to a structural shift in market dynamics.
In the macro space, data yesterday showed Germany’s Ifo index improved slightly to 86.9 in April from 86.7 in March, driven by stronger current assessments, though business expectations weakened. Despite the mild positive surprise, US tariffs and geopolitical shifts pose significant risks. Confidence indicators suggest the German economy has bottomed out but will likely face delays in recovery due to tariff impacts and structural challenges. Fiscal stimulus promises long-term growth but lacks immediate implementation plans, while government tensions over spending could limit its effectiveness. Broader uncertainties, including Ukraine negotiations and shifts in US-China trade policies, add to the economic outlook’s complexity.
Meanwhile, traders have added to European Central Bank (ECB) rate-cut wagers following dovish comments from officials. Markets are currently pricing a 50% probability of another two more rate cuts over the next two ECB meetings, which is another factor capping euro upside for now.
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
Financial markets started the week under pressure with worries about the relationship between US President Donald Trump and Federal Reserve (Fed) Chair Jerome Powell hitting sentiment.
With Powell cautious on cutting rates because the impact of President Trump’s tariff plan is still uncertain, Trump wrote “Powell’s termination cannot come fast enough!”
Financial markets fretted that concerns around the independence of the Fed might add to a recent sell-off in US bond markets and long-term yields rose whilst equity markets turned lower.
On Tuesday, President Trump stepped back from his earlier warning, saying: “I have no intention of firing him.” Financial markets gained with the S&P 500 up 3.0% on the day. These reactions suggest that significant yield rises on the long end will likely prompt mitigating actions to stabilize markets.
In FX markets, the initial worries sent the US dollar lower, with the USD index striking three-year lows. The greenback later rallied with equities as global risk appetite picked up.
The dollar saw some solid gains across markets with, most notably, the USD/JPY rebounding from ¥140.00 while EUR/USD turned sharply lower from $1.16 to $1.13.
In a shorter week due to the Easter holiday, economic data softened moderately, with PMI numbers the main release. In general, services PMI were weaker, with German and US manufacturing PMIs the only highlight.
Global Macro Twists and U-turns
Inconsistent messaging. The U-turns keep coming as President Trump clarified he had no plans to fire Fed Chair Jerome Powell having rattled markets with multiple attacks against the Fed’s policy making. Risk appetite improved and was supported further after the President suggested the US is considering lower levies for Chinese products. Then, Treasury Secretary Bessent said Trump had not offered to cut tariffs on China on a unilateral basis, as market participants were dealt a reality check on a timely resolution to the US-China trade war.
Easing trade war, rate cut hopes. Cleveland Fed President Beth Hammack came to the rescue though, suggesting the Fed could cut rates as early as June if it has clear evidence of the economy’s direction. And that sentiment was later echoed by Governor Christopher Waller who said he’d support rate cuts if there’s a significant rise in unemployment. And in a notable development, Bloomberg reported that China is considering suspending its 125% tariff on certain US imports, signalling a potential easing in trade tensions.
Volatility remains. Volatility-inducing policy statements just keep rocking investors though. With macroeconomic uncertainty and geopolitical risks still unresolved, volatility across financial markets is likely to remain elevated. That said, optimism is the name of the game for now as S&P 500 index was able to exit correction territory, ending at least 10% above its recent low set in the wake of Trump’s April 2 “liberation day” tariffs.
US Dollar holds. The inconsistent messaging continues to keep investors on edge and reluctant to hold US assets as the dollar continues to hover close to 3-year lows. Despite the attempted recovery over the past few days, the US dollar index is still nursing an 8% fall year-to-date – marking its third worst start to a year on record.
Regional outlooks: US, EZ & UK First key sentiment gauges since “Liberation Day”
Unusual discrepancies. April’s PMI figures revealed notable declines in the Euro-area but driven predominantly by weakening services activity. The anticipated impact of US tariffs on manufacturing remains unclear, where sentiment hasn’t yet fully shifted. But traditional survey-based data, like PMIs, often lags in reflecting the full impact of major events. As such, the effects of recent tariff tensions and global uncertainties might not yet be fully apparent. Indeed, future output expectations dropped to their lowest levels since late 2022, signaling increased economic uncertainty.
UK is an outlier. Britain’s private sector faced its sharpest downturn in over two years, as Trump’s tariffs led to a significant drop in overseas orders, stoking concerns of a potential recession. The UK’s composite PMI tumbled to 48.2 in April, down from 51.5 in March. This figure not only fell short of economists’ expectations of 50.4 but also dropped below the critical 50 mark, signaling a contraction in economic activity.
US activity growth slows. The US Composite PMI fell to 51.2 in April, marking the slowest private sector growth in 16 months. Services PMI dropped to 51.4, while manufacturing unexpectedly rose to 50.7. Business expectations hit pandemic-era lows, and prices surged sharply, especially for manufactured goods due to tariffs. The outlook for the US economy remains murky, but if data continues to soften, the US exceptionalism narrative will continue fading, which will weigh on the already beleaguered dollar.
Week ahead Inflation and growth data dominate the week
Inflation data. The upcoming week will see inflation data emerge as the central focus across major economies. In Australia, Q1 CPI figures (Wednesday) are expected to show a quarterly rise of 0.8% QoQ and 2.3% YoY, which could provide insight into the Reserve Bank of Australia’s policy trajectory. Meanwhile, preliminary inflation readings from Germany and France (Wednesday) will offer a closer look at price pressures within the Eurozone, with Eurozone-wide CPI data due Friday. These data points will likely shape expectations around the European Central Bank’s (ECB) next moves.
Additionally, the US will release its Personal Income and Spending (Wednesday) alongside the PCE price index—widely regarded as the Federal Reserve’s preferred measure of inflation. These figures will be closely monitored amidst ongoing speculation about the Fed’s future rate decisions.
Key growth indicators. Growth metrics will also be in focus. The US Q1 GDP preliminary reading (Wednesday) is expected to show annualized growth of 0.4%. The Eurozone will release Q1 GDP estimates as well. This, alongside PMI data from the manufacturing sector in US (Thursday) and across Europe (Friday), will offer further context on the region’s economic momentum.
BoJ in focus. The Bank of Japan (BoJ) will announce its policy decision on Thursday, with the target rate expected to remain unchanged at 0.5%.
Labor market. Labour market data from the US (Friday) will be a key highlight, with nonfarm payrolls expected to rise by 123k in April, a notable slowdown from March’s strong 228k reading. The unemployment rate is forecast to hold steady at 4.2%. These figures will provide insight into the resilience of the US labour market amidst tighter monetary conditions.
FX Views ”Sell America” trade slows (for now)
USD Retraces, but risks abound. The US dollar index has fallen over 8% year-to-date – marking its third worst start to a year on record as the torrent of inconsistent messaging from the Trump administration continues to keep investors’ appetite for US assets at bay. Hence the dollar index recently dropped to a 3-year low despite a simultaneous rise in Treasury yields. There has been a clear skew towards bearish USD sentiment with the options premium paid to hedge against a decline in the US currency over the next year the highest since March 2020. However, this week, “sell America” trade starting unwinding after the Trump administration signalled a softer approach on China and Fed independence. Market participants seem to believe they’ve regained some influence over US policy, fostering optimism. However, this perception is far from assured, leaving uncertainty lingering over the dollar’s longer-term trajectory. The market is increasingly considering de-dollarization, with reduced reserves and disinvestment from heavily weighted US assets. Heightened sensitivity to policy changes and growing skepticism about the dollar’s dominance remain key themes going forward.
EUR Taking a breather. The euro sharply recoiled from over 3-year highs versus the dollar this week. EUR/USD spiked to $1.1573, extending its appreciation from February lows to 14% – marking one of the fastest and largest euro advances in the past five years. Much of the recent surge is largely driven by weakening confidence in the dollar, with little justification from short-term rate dynamics. The euro remains a key recipient for safe-haven flight from USD, but upside momentum has (at last) started to ease. The $1.130 area is crucial as attempts to break below have faced heavy buying interest here. A decisive break could open the door for a bigger leg lower with the 21-day moving average, at $1.1136, another important level to decipher the short-term trend. But despite the potential for an extended pullback, longer term dynamics appear favourable with options traders betting on lasting euro strength, pointing to a structural shift in market dynamics.
GBP Sensitive to ro-ro. Risk on/risk off dominates sterling’s price action. The cautious relief rally in financial markets this week allowed GBP/EUR to reclaim the €1.17. Further improvements in risk sentiment are required to asymmetrically help the pound relative to the euro, which dropped to a 17-month low earlier this month. But uncertainty remains elevated and a downside bias intact as long as GBP/EUR stays below its 21-day moving average at €1.1743. Moreover, the latest PMI data suggest the UK economy is suffering more than the Eurozone, undermining the UK economy’s comparatively lower exposure to the negative impacts of US tariffs. Versus the dollar, the pound climbed for ten days straight; a feat matched only twice before in history. Gains were driven largely by US dollar weakness as opposed to sterling strength though, hence signs of potential de-escalation on tariffs and fading Fed independence risks revived dollar demand and stopped GBP/USD’s ascent. The pair reversed course just above $1.34, a 7-month high, but remains over 4% higher since Liberation Day. Rate differentials suggest the pound is overvalued but options traders are still bullish over the next three months.
CHF Moves versus euro matter more. The franc has surged roughly 7% against the dollar so far this month and is set for the biggest monthly gain since 2015. It has appreciated by over 5% in trade-weighted terms and in real terms, it is close to levels prevailing in early-2024, just before the SNB began its cutting cycle. Ultimately, the Swiss franc’s recent appreciation is a deflationary shock for the SNB. This is due to weak starting inflation dynamics and a relatively high FX pass-through to inflation by G10 standards. A policy response, such as negative rates, may be needed, though FX intervention could be a preferred tool. Still, the franc’s performance relative to the euro remains more critical for inflation given import volumes. With EUR/CHF declining less than 2% this month, the SNB may hold off on action for now, suggesting further potential for franc strength.
CADDollar weakness sustains Loonie. The primary driver for the Loonie in the short term will continue to be dollar weakness. The DXY index has taken another hit this week, reaching its lowest level since April 2022. In April alone, the DXY has dropped 5%, while the USD/CAD has gained 3%. Investor sentiment toward the Loonie has shifted significantly, with bearish positions now at their lowest since January 2021. This shift is evident in the one-year USD/CAD risk reversal, which has moved in favor of calls—marking the least bearish close for the Loonie in over two years.
The Loonie continues to tread below its 200-day SMA, which sits at 1.4015, and has established a strong support range at the 1.38 level. The 1.378 mark is the new low for 2025, a trading range last seen when President Trump was elected the 47th President of the United States. After five consecutive weeks of decline from the 1.44 level, the Loonie has found support at the 90-week SMA at 1.3783, while the 60-week SMA has become a strong resistance level at 1.39. Current price movements might be subject to a medium-term rebound, potentially revisiting the upper side of the 1.373-1.40 trading range.
AUD Rebounds despite weak fundamentals. Australia’s April S&P Global flash composite PMI dipped to a two-month low at 51.4, with manufacturing easing to 51.7 and services to 51.4. Business optimism slumped to its lowest since October amid tariff-related uncertainties affecting export orders. Despite these headwinds, domestic demand drove new business growth to its fastest pace in three years, supporting steady hiring activity. The Australian dollar is staging a notable recovery, rallying back toward critical medium-term resistance in the 0.63-0.64 range following its recent slide to 0.5876-0.5921 support. Looking ahead, expect the rally to face significant headwind near the 0.6415 October 2022 pattern trend line. Upcoming CPI, PPI, and retail sales releases will be crucial catalysts for determining directional momentum.
CNYYuan under pressure as PBoC signals greater flexibility. The international landscape is evolving, with enterprises increasingly open to yuan-denominated settlements as questions emerge about US asset stability. This shift is evidenced by recent Treasury bill selling and growing issuance of yuan-denominated bonds, which reached CNY950 billion by mid-April. Despite these developments, the dollar’s dominance remains intact, though somewhat diminished. According to the South China Morning Post, enterprises are becoming more open to using the yuan in settlement of international payments. USD/CNY’s path of least resistance in the long term appears to be toward 7.50 (See correlation chart), reflecting the People’s Bank of China’s apparent willingness to tolerate managed yuan weakness. In the short term, 7.3511 recent highs will be the next key resistance level. Market participants should closely monitor upcoming Chinese manufacturing PMI, non-manufacturing PMI, and composite PMI releases as key gauges of economic momentum that could impact currency movements.
JPY Weakens 2% from 7-month peak. USD/JPY has strengthened 1% last week, after sharp retest of seven-month low and 140 key psychological level. Technical analysis suggests any closes above 144.02 would indicate a tactical bottom and potentially trigger short-term mean reversion, with rebounds likely to fade in the 146-147 range. On the macro front, Japan’s April au Jibun Bank flash composite PMI returned to growth at 51.1 (from 48.9), driven primarily by services expansion to 52.2 from 50.0. Factory sentiment reached its lowest point since June 2020 amid global economic uncertainty. Key upcoming catalysts for the yen include industrial production figures, retail sales data, the Bank of Japan rate decision, and unemployment statistics, all of which will provide critical insight into JPY’s near-term direction.
MXNRisk rally boosts Mexican Peso. Mexican peso has benefited from recent risk rally in markets and renewed hopes that stiff tariffs against major trading partners might be negotiated away in the next few months. Discussions between President Sheinbaum and President Trump have been ramping up, although no agreement has been reached yet. Sheinbaum’s government has chosen not to impose retaliatory tariffs on the U.S., keeping tensions from escalating further.
A key issue for Sheinbaum—and Mexico’s economy overall—is the auto industry. When the tariffs took effect in early April, automakers like Stellantis NV Motor Corp had to halt some production in Mexico, while others reduced overtime. With the auto sector making up around 30% of Mexico’s exports, these tariffs could deal a significant blow to manufacturing.
At the same time, funds and institutional investors have shifted their stance on the Mexican peso, moving from heavily short positions to a more neutral outlook.
The USD/MXN pair has the 200-day simple moving average (SMA) at 19.95, the 100-day SMA at 20.3438, and the 50-day SMA at 20.2505. The peso is currently trading at its weakest level since October 2024, a level last seen before President Trump’s election as the 47th president of the United States. Year to date, the peso has gained more than 6% against the US dollar.
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
It’s been yet another topsy turvy week in financial markets, but Thursday marked a third consecutive day of risk-on trading, fuelled by dovish remarks from Fed officials and a de-escalation in Trump’s trade war. Cross-asset price movements suggested a more stable and lasting improvement in market sentiment, contrasting with the sharp, short-covering-driven rallies seen earlier in the week.
Cleveland Fed President Beth Hammack got things rolling yesterday, noting the Fed could cut rates as early as June if it has clear evidence of the economy’s direction. And that sentiment was later echoed by Governor Christopher Waller who said he’d support rate cuts if there’s a significant rise in unemployment. And in the last few hours, in a notable development, Bloomberg reported that China is considering suspending its 125% tariff on certain US imports, signalling a potential easing in trade tensions.
The S&P 500 index was able to exit correction territory, ending at least 10% above its recent low set in the wake of Trump’s April 2 “liberation day” tariffs. In the FX space, US dollar demand is picking up, whilst traditional safe havens like the yen, euro, and Swiss franc have weakened, the latter down more than 1% this week.
Recent events also underscore the bond market’s influence on President Trump’s decisions. After sharp increases in long-term yields caused market unease, Trump suspended most tariffs for 90 days. Similarly, following another yield spike after his remarks on Fed Chair Powell, he clarified he had no plans to fire Powell. These reactions suggest that significant yield rises on the long end will likely prompt mitigating actions to stabilize markets.
Euro quelled by risk-on mood
George Vessey – Lead FX & Macro Strategist
Despite the modest relief rally for the dollar in the wake of recent news, the $1.13 mark remains a key short-term support for EUR/USD for now. A decisive break could open the door for a bigger leg lower with the 21-day moving average, at $1.1136, another important level to decipher the short-term trend. But despite the potential for an extended pullback, longer term dynamics appear favourable with options traders betting on lasting euro strength, pointing to a structural shift in market dynamics.
In the macro space, data yesterday showed Germany’s Ifo index improved slightly to 86.9 in April from 86.7 in March, driven by stronger current assessments, though business expectations weakened. Despite the mild positive surprise, US tariffs and geopolitical shifts pose significant risks. Confidence indicators suggest the German economy has bottomed out but will likely face delays in recovery due to tariff impacts and structural challenges. Fiscal stimulus promises long-term growth but lacks immediate implementation plans, while government tensions over spending could limit its effectiveness. Broader uncertainties, including Ukraine negotiations and shifts in US-China trade policies, add to the economic outlook’s complexity.
Meanwhile, traders have added to European Central Bank (ECB) rate-cut wagers following dovish comments from officials. Markets are currently pricing a 50% probability of another two more rate cuts over the next two ECB meetings, which is another factor capping euro upside for now.
Brits bask in sunshine boom
George Vessey – Lead FX & Macro Strategist
Retail sales in the UK rose by 0.4% m/m in March 2025, defying forecasts of a 0.4% decline and follows a revised 0.7% gain in February. Exceptional March sunshine drove retail sales higher for the third consecutive month, achieving the best streak in sales growth since early 2021, when the economy recovered from Covid lockdowns. However, Trump’s tariffs in April have dented consumer confidence to its lowest level since November 2023.
The British pound has largely shrugged off the upbeat retail sales data though given its lagging nature and the huge developments we’ve seen unfold on a global scale this month. Still, GBP/EUR finds itself atop the €1.17 handle and further improvements in risk sentiment should asymmetrically help the pound relative to the euro, which dropped to a 17-month low earlier this month. But uncertainty remains elevated and a downside bias intact as long as GBP/EUR stays below its 21-day moving average at €1.1743.
As for GBP/USD, the pair has dipped under $1.33 again this morning, marginally lower on the week, but still around 3% up on the month so far. Rate differentials suggest the pound is overvalued by over 1% but options traders are still bullish GBP versus USD over the next three months. On a more cautious note, the last time the pair marched above $1.34 back in September last year, a 9% drop over four months unfolded.
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Trump confirms China meeting, risk sentiment improves
The greenback fell as Trump’s comments on China meetings triggered market optimism despite Chinese officials’ earlier dismissals of progress.
Euro firmed from around 1.1365 to 1.1395 during Trump’s press conference with Norway’s PM, benefiting earlier from a positive German Ifo survey.
Meanwhile, Fed Waller’s comments that he’d support rate cuts fuel hopes.
In the equities space, S&P 500 gains 2% while Nasdaq was up 2.7% overnight.
US curves bull steepened on Fedspeak suggesting a rate cut could come sooner if labor and growth data weakens notably and/or market volatility remains high.
Singapore industrial production is due for release today while antipodean markets observe local holidays.
NZD/USD was up +0.9% and AUD/USD gains +0.8%.
USD/CNH was flat while USD/SGD was down -0.4% overnight.
Fed Waller said the impact of tariffs is likely to occur in July
If businesses begin to lay off employees and the unemployment rate begins to climb, Fed Governor Waller stated that the Fed would support rate cuts.
Waller, meantime, stated that he believes the effects of tariffs on the economy will become apparent after July, when the jobless rate is expected to rapidly increase.
He also restates that the inflation shock will only last a short while.
Re APAC FX, as we’ve mentioned earlier, USD/SGD has recovered from oversold levels.
The next key resistance levels for USD/SGD will be 21-day EMA of 1.3223, and 50-day EMA of 1.3315.
ECB Rehn says banks should continue cutting, EUR recovers
The ECB According to Governor Rehn, tariffs have a two-pronged effect on inflation in Europe.
He believes the ECB should continue lowering rates if the inflation forecast develops as anticipated.
Nevertheless, EUR/USD looks set to continue higher with key support levels now at 21-day EMA of 1.1208.
For EUR/SGD, the pair also has its 21-day EMA of 1.4815 as key support handle, where EUR buyers may look to take advantage.
AUD/EUR however has flirted with the lows of 0.5390 recently, and now near its 21-day EMA resistance of 0.5642.
Antipodeans recovered as risk sentiment improves
Table: seven-day rolling currency trends and trading ranges
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
Mexican peso has benefited from recent risk rally in markets and renewed hopes that stiff tariffs against major trading partners might be negotiated away in the next few months. Discussions between President Sheinbaum and President Trump have been ramping up, although no agreement has been reached yet. Sheinbaum’s government has chosen not to impose retaliatory tariffs on the U.S., keeping tensions from escalating further.
A key issue for Sheinbaum—and Mexico’s economy overall—is the auto industry. When the tariffs took effect in early April, automakers like Stellantis NV Motor Corp had to halt some production in Mexico, while others reduced overtime. With the auto sector making up around 30% of Mexico’s exports, these tariffs could deal a significant blow to manufacturing.
In 2024, Mexico’s automotive industry set record highs in production and exports. The Automotive Industry Administrative Registry of Light Vehicles reported that the U.S. was the primary destination for light vehicle exports, accounting for 2,771,000 units, or nearly 80% of the total.
At the same time, funds and institutional investors have shifted their stance on the Mexican peso, moving from heavily short positions to a more neutral outlook.
The USD/MXN pair has the 200-day simple moving average (SMA) at 19.95, the 100-day SMA at 20.3438, and the 50-day SMA at 20.2505. The peso is currently trading at its weakest level since October 2024, a level last seen before President Trump’s election as the 47th president of the United States. Year to date, the peso has gained more than 6% against the US dollar.
Tariff seesaw swings on
George Vessey – Lead FX & Macro Strategist
Volatility-inducing policy statements just keep rocking investors. US equities looked poised to build on the biggest gains in two weeks, with the S&P 500 rising over 3% at one point yesterday on hopes of de-escalating trade tensions. Optimism was swiftly reined in though after President Donald Trump reaffirmed his commitment on tariffs. With macroeconomic uncertainty and geopolitical risks still unresolved, volatility across financial markets remains elevated.
The U-turns keep coming as President Trump allayed fears that he plans to fire Fed Chair Jerome Powell after rattling markets with multiple attacks against the Fed’s policy making. Risk appetite improved and was supported further after the President suggested the US is considering lower levies for Chinese products. Then, Treasury Secretary Bessent said Trump had not offered to cut tariffs on China on a unilateral basis, as market participants were dealt a reality check on a timely resolution to the US-China trade war. The inconsistent messaging continues to keep investors on edge and reluctant to hold US assets as the dollar continues to hover close to 3-year lows. Despite the attempted recovery over the past two days, the US dollar index has fallen over 8% year-to-date – marking its third worst start to a year on record.
On the macro front, the US Composite PMI fell to 51.2 in April, marking the slowest private sector growth in 16 months. Services PMI dropped to 51.4, while manufacturing unexpectedly rose to 50.7. Business expectations hit pandemic-era lows, and prices surged sharply, especially for manufactured goods due to tariffs. The outlook for the US economy remains murky, but if data continues to soften, the US exceptionalism narrative will continue fading, which will weigh further on the already beleaguered dollar.
Trumponomics isn’t a new play
Kevin Ford – FX & Macro Strategist
Trumponomics in 2025 centers on a few key pillars: tariffs and trade policies tied to strategic global bargaining, tax cuts and deregulation, and shifts in labor market and immigration policies.
Interestingly, Trumponomics isn’t a completely new play. Argentina has implemented similar measures since President Mile took office, focusing on fiscal austerity, deregulation, and cutting red tape. The results have been striking, with inflation dropping from triple digits and, perhaps more impressively, the elimination of a fiscal deficit for the first time in 123 years. However, comparisons between Argentina and the United States have their limits, particularly given the outsized role tariffs play in the U.S. context.
In the U.S., recent surveys show consumers cutting back on discretionary spending and growing increasingly concerned about job security, especially in export-dependent industries. Sentiment is declining, and inflation expectations are rising, both domestically and internationally. This raises a critical question: if Trumponomics seeks to emulate Argentina’s success, how do deregulation and the push for smaller government align with the use of tariffs? The “small yard, high fence” strategy highlights this contradiction. Tariffs are likely to drive up prices in the short term, fueling inflationary pressure and public dissatisfaction, while also risking a contraction in economic growth and broader instability. Policymaking aimed at bringing global players to the U.S. negotiating table has already had significant economic repercussions.
Although sentiment measures are not always reliable indicators of future economic activity, the uncertainty surrounding trade policies is likely to continue weighing on growth prospects in the coming quarters.
Euro’s unwind has room to run
George Vessey – Lead FX & Macro Strategist
After hitting a more than 3-year high recently just shy of $1.16, EUR/USD has pulled back to near $1.13. The 21-day moving average located at $1.1136 could act as a magnet in the short term, but the common currency continues to act as an attractive liquid alternative to the dollar in times of heightened risk aversion. For now, the uptrend remains intact, but the pace of the euro’s rally does give rise to an extended pullback in the very near term.
The April PMI was the first key sentiment gauge for the Eurozone since Trump’s ‘Liberation Day.’ The Eurozone’s figures reflect mixed sentiment amid ongoing tariff threats. It dropped to 50.1, its lowest in four months, though manufacturing showed slight improvement at 48.7, while services weakened to 49.7. France and Germany’s composite PMIs fell below 50, signalling contraction. Price pressures eased, supporting the ECB’s rate cut and raising the likelihood of further easing.
For the euro, these developments heighten risks of disinflation and stagnation. Economic uncertainty weighs on optimism, which could lead to more downward pressure on the currency if data weakens further. Until fiscal measures in Germany and European defense spending boost activity, further euro gains may be limited in the short term, but longer-term dynamics appear favourable given the regime shift in global trade and reduced demand for US assets unfolding.
Struggling UK economy bodes ill for sterling
George Vessey – Lead FX & Macro Strategist
The cautious relief rally in financial markets this week allowed GBP/EUR to reclaim the €1.17 handle briefly, having dropped to a 17-month low earlier this month. But a downside bias remains intact for the pair in the short-term so long as it remains below its 21-day moving average located at €1.1743. Meanwhile, GBP/USD has matched the recent drawdown in EUR/USD – dropping over 1% from 7-month highs above $1.34.
The stronger performance of EUR/USD compared to GBP/USD this month has caused the GBP/EUR exchange rate to decline. Initially, the ‘sell America’ trend put pressure on GBP/EUR; however, the recent EUR/USD pullback has shifted dynamics. Meanwhile, data indicates that the UK economy may be more impacted by tariff uncertainty than Europe, challenging earlier assumptions. Britain’s private sector faced its sharpest downturn in over two years, as Trump’s tariffs led to a significant drop in overseas orders, stoking concerns of a potential recession. The UK’s composite PMI tumbled to 48.2 in April, down from 51.5 in March. This figure not only fell short of economists’ expectations of 50.4 but also dropped below the critical 50 mark, signalling a contraction in economic activity.
The survey highlights mounting pressures on the UK economy amid global trade uncertainties and when we overlay the PMI differential over GBP/EUR, the figures over the past few months don’t bode well for the pound’s medium-term outlook versus the euro.
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
