In the Asian session, the US dollar index shed losses amid a slight recovery in the yields of Treasury notes and a mixed dynamic in markets. Its price rolled back to 103 versus its main rivals.

Overall, it reached 120.5. The expectations of a policy reversal by the Fed will continue to exert pressure on the greenback in the short term. At the same time, persistently high inflation, a strong economy, and hawkish statements by Fed officials may stimulate its upward movement.

It means that revised GDP figures and the CPI may significantly impact its trajectory. In case of positive data, the US dollar will regain the upper hand, rising to the resistance levels of 103.4 and 104. If the reports are downbeat, the US currency could fall to 101.9, a monthly low of March 23. There is even a chance of a decline to 100.8, the low of February 2.

The yen is also trading in a wide range as the fiscal year in Japan ends on March 31.

As Japanese companies are converting their profits from dollars to the national currency, the yen is steadily rising. The dollar/yen pair has already slid to the range of 132.1-132.9.

However, talk about Japan's credit rating and the cautious optimism of Fed policymakers pushed the pair to the level of 132.4.

Geopolitical concerns related to Russia, North Korea, and China are supporting the yen as a safe haven asset. Today's statements by the Prime Minister of Japan also facilitated its further growth.

Fumio Kishida spoke in favor of raising wages, which contradicts the BoJ’s ultra-soft policy. The bears managed to regain control.

Commodity currencies appreciated in the morning amid a weak US dollar and rising US stock indices. The Australian dollar touched 0.6731 during the Asian session, moving in the range of 0.6661–0.6719. Although it was rather volatile, it managed to retain an upward movement.

At the same time, the Aussie ignored internal factors, which should have pushed it down. The RBA meeting will be held in a few days on April 4.

The regulator is widely expected to take a pause in the tightening cycle. Traders are betting on such a scenario after analyzing the latest data, which showed a decrease in inflation for the second month in a row.

The Reserve Bank of New Zealand remains the only regulator in the region that still plans to raise the interest rate. Annual inflation in New Zealand may approach a 3-decade high of 7.2%.

Therefore, there is no doubt that the watchdog will hike the key rate on April 5. The kiwi/dollar pair grew to 0.6246 amid such expectations. The kiwi was moving in the bullish price corridor of 0.6203–0.6251 during the Asian session.


00:00 Intro
00:30 Optimism in the Asia-Pacific region
02:01 Relations between the US and China
03:05 KRISTALINA GEORGIEVA
04:08 USDX
05:27 USD/JPY
06:25 AUD/USD
07:14 NZD/USD


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