CNH: USD/CNY Fixing Steady, Error Term Slightly Wider

The USD has continued weakening in early APAC trading after it fell further on Friday despite higher 10-year US yields driven by US President Trump pressuring Fed Chair Powell to cut rates and threatening to replace him. The USD DXY index is currently down 0.6% after 0.3% on Friday with all G10 currencies stronger against the greenback but especially risk-averse euro, yen and Swedish krona. Trading continues to be impacted by holidays with Europe closed today as well as Australia/NZ & Hong Kong.

• USDJPY is down 0.8% to 141.06 slightly off the intraday low of 141.05, its lowest since September 2024 and below support at 141.62 and approaching 141.00. PM Ishiba has spoken on US-Japan trade talks stating that they could be a “model” for the rest of the world. They are being watched closely given that Japan is a close ally of the US.
• The euro is 0.7% stronger against the US dollar at 1.1474 following a peak of 1.1486, highest since February 2022 and above resistance at 1.1473. Italian PM Meloni said that she believed that an EU-US trade agreement could be reached to reduce the 20% US tariff.
• The Swiss franc also continues to benefit from the pullback in risk. USDCHF is +0.7% to 0.8110 while EURCHF is flat at 0.9305.
• Risk-sensitive Aussie is underperforming with AUDUSD up only 0.2% to 0.6386 off the intraday high of 0.6400. Kiwi is outperforming with NZDUSD rising 0.4% to 0.5962 leaving AUDNZD down 0.2% to 1.0712. Both markets are shut today.
• Asian equities are so far mixed with the Nikkei down 10% but KOSPI up 0.1% while the S&P e-mini is 0.5% lower. Oil prices are weaker with WTI -1.8% to $63.50, Copper -0.7% but iron ore up slightly to above $98.50/t.

• China Benchmark 5-Year Loan Prime Rate Kept Unchanged at 3.6%
• China Benchmark 1-Year Loan Prime Rate Kept Unchanged at 3.1%

The yen continues to benefit from safe haven flows due to market jitters over the outlook for the global economy given increased US trade protectionism. USDJPY is down 5.2% in April after falling 0.2% to 142.18 on Friday. US equity futures have started today lower driving a strengthening of the yen with USDJPY down another 0.5% to 141.44, the lowest since September last year. The USD DXY index is down 0.4% after 0.15% on Friday. 

• USDJPY fell to a low of 142.12 on Friday and today has already reached 141.50, below initial support at 141.62, which opens up 141.00. The trend condition remains bearish as the pair makes fresh cycle lows with a sequence of lower lows and lower highs. Initial resistance is at 143.59.
• EURJPY was little changed on Friday rising moderately to 162.00 off the intraday high of 162.16. In today’s risk-off move, euro continues to slightly outperform the yen leaving EURJPY up 0.1% to 162.07 after falling to 161.65 earlier and then rising to 162.21. Trend conditions remain bullish with the bull trigger at 164.19. Key support is at 158.30.
• After many markets were closed on Friday, the tone at the start of today’s trading is softer with S&P equity futures down 0.5% and Nasdaq -0.5% so far and oil prices lower with WTI -1.4% to $63.79/bbl.
• Later today Japan’s March condominium sales print. The key data this week is likely to be preliminary April Tokyo CPI data released on Friday.