Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Powell comments drive USD lower as equities slump
The greenback extended its losses, dropping below the key 100 level as Fed Chair Powell’s comments exacerbated market concerns.
The USD index fell to around 99.30 after Powell stated the “Fed has time to wait for greater clarity for the time being” and warned that tariffs may derail both labor market and inflation goals this year.
Powell noted he expects both unemployment and inflation rates to tick higher , emphasizing that “we can’t have strong labor markets without price stability” and that “inflationary effects of tariffs may be more persistent.”
The Canadian dollar was among the gainers, with USD/CAD close at 1.3859 after the Bank of Canada held rates steady.
The Japanese yen showed significant strength, with USD/JPY dropping to below 142.00 as US Treasury yields declined.
Several emerging market rate decisions are scheduled, with many countries observing local holidays ahead of a long weekend in the US.
Dollar index was down 0.3% overnight, Antipodeans were up with NZD/USD gained 0.6% and AUD/USD gained 0.4%. USD/CNH down 0.4%, USD/JPY down 0.9% and USD/SGD was down 0.6%.
Fed’s Hammack sees risks of reduced growth, employment, and higher inflation
Fed President Hammack, who did not cast a ballot, has stated in a speech that she believes the risks are skewed towards greater inflation, slower growth, and fewer jobs.
She believes that a fairly conservative approach is justified because financial circumstances have tightened. She reaffirmed the significance of maintaining anchored inflation expectations.
Looking at another safe haven proxy, the Yen, which has strengthened considerably overnight.
USD/JPY is now at the low end of its trading range, with the completion of head and shoulders top at 140.25, where USD buyers may look to take advantage.
China now faces the potential for up to 245% tariffs
A White House fact sheet released Tuesday night that claimed, “China now faces up to a 245% tariff on imports to the US as a result of its retaliatory actions,” has garnered a lot of attention.
This doesn’t appear to be another escalation, which is why the word “faces up to” is crucial. This most likely refers to the entire spectrum of tariffs imposed on particular commodities.
President Trump’s 145% tariffs on China frequently come in addition to any existing levies. With the addition of the most recent round of tariffs, the total for “syringes and needles” is now 245%.
It appears that the White House information sheet also uses that number. There is no need for further escalation; the issue now is how the two parties convince themselves to sit down for talks.
USD/CNH is now down circa 2% from its recent daily highs of 7.4257 on April 8th, 2025.
USD buyers may look to take advantage, with the next key support for USD/CNH at 50-day EMA of 7.2860.
Antipodeans swing back to strength
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 14 – 18 April
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*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.
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