Major currency pairs remain stable with reduced trading volumes on Easter Friday, as markets are closed for the holiday. No key economic data releases are expected, leading to quiet market activity approaching the weekend.
The US Dollar has declined against major currencies this month, notably losing 7.45% against the Swiss Franc. This data reflects its performance against currencies like the Euro, Yen, and Canadian Dollar, among others.
Euro Performance And Central Bank Decisions
Following a 25 bps rate cut by the European Central Bank, the Euro performed modestly against the US Dollar. Uncertainty continues to affect the Eurozone’s economic forecast, keeping EUR/USD in a narrow range.
US initial jobless claims fell to 215,000, and US President Donald Trump indicated possible tariff negotiations with China. The US Dollar Index rose slightly to around 99.50.
Gold reached a new record-high of $3,357 before settling slightly lower at $3,327. GBP/USD moved positively towards 1.3280, while USD/JPY remained below 142.50, on track for a third consecutive weekly loss. Bank of Japan’s Governor reiterated potential rate hikes if inflation targets are met.
Tariffs, often confused with taxes, are duties on imports to protect domestic industries by providing a price advantage. President Donald Trump plans to use tariffs to support the US economy, especially targeting Mexico, China, and Canada.
With trading volumes thinning due to the long Easter weekend and no considerable data releases set to emerge, markets maintain a subdued tone. This sort of environment typically results in tighter ranges and suppressed volatility, limiting opportunities for short-term momentum strategies and suggesting that patience will be necessary. Most of the major currency pairs remain calm, which is not surprising given the widespread market closures.
Currency Volatility And Tariff Impacts
The broader movements over the past month offer more telling guidance. The US Dollar has experienced broad-based weakness, the most dramatic being its drop against the Swiss Franc—falling 7.45%. That type of move, unusually sharp in a G10 pairing, points to a flight to perceived safety and refuge assets. The Dollar has also softened against other major counterparts including the Euro and Yen, which adds to the narrative of ebbing confidence in the Dollar’s strength, at least in the near term. We would focus more sharply on options skews and implied volatility surfaces where the Franc is running rich—this signals a defensive tone still embedded in the market.
Lagarde’s earlier rate cut of 25 basis points did little to shift the Euro meaningfully. While the move was intended to reinforce support, the response in EUR/USD showed little appetite from traders to reprice the shared currency too strongly one way or the other. The range-bound nature of that pair mirrors macro uncertainty across the Euro area, where data continues to be mixed, offering little traction either for bulls or bears. Positioning remains modest, as implied vols rest near their month-to-date lows. There’s little reason to chase breakout plays unless upcoming inflation or wage data deviates sharply from expectations.
Meanwhile, US data had a mildly supportive tone, with jobless claims at 215,000—below projections. While not a game-changer, this kind of print reinforces the idea that American labour markets maintain underlying strength. The small lift in the US Dollar Index towards 99.50 reflects only a moderate response to these developments. The signal-to-noise ratio is low in this move, and few directional trades are being built around this index level. We should anticipate light flows for now with a vigilance on whether this index can sustain above the 100-handle in the coming sessions.
Gold’s fresh high at $3,357, even after a retreat to $3,327, attracted attention. Support remains firm, and there are signs of long-term accumulation in the options market with strikes as high as $3,500 attracting open interest. We noted increasing appetite for call spreads further out in expiry, suggesting speculators are positioning themselves not just for more upside, but doing so defensively. The asset’s behaviour in tandem with the Dollar suggests inflation-hedging narratives gaining ground again.
Sterling, moving up towards 1.3280 against the Dollar, has been quietly resilient. Notably, the pair nudged up even without domestic news catalysts. This steady appreciation signals either a broad-based Dollar retreat or reserved yet present optimism about the UK economy. It’s worth tracking whether rate expectations by the Bank of England begin to shift. For now, volatility is compressed, but a breach through 1.33 would bring short covering and fresh longs into view.
USD/JPY remains below 142.50 and is in line for a third weekly decline in a row. With Governor Ueda not dismissing the possibility of further rate increases—should inflation data hold—yen shorts are more cautious. While the cross has historically been a yield-differential trade, we are starting to see some reassessment in rate expectations for Japan. The currency’s sensitivity to US front-end yield moves has weakened slightly, and this could open the door to lower implied vols compressing realised vol differences. That said, direction will stay biased to downside unless yield support returns decisively.
Lastly, tariff proposals as described by Trump have started to creep back into the market narrative—not just as headlines but as real pricing events, especially tied to US-Mexico and US-China flows. Tariffs, which are essentially duties on goods, create additional price pressure on importers and, potentially, on consumers. Their purpose is often to bolster domestic production by making foreign alternatives less competitive. We are seeing some unease in EMFX forward curves and mild steepening in Mexico’s cross-currency basis swaps—this reflects traders beginning to assess potential cost adjustments if duties return in force.
All in, this week requires watching not just for data releases but also for tone shifts in rhetoric—whether from central banks or governments. The next move won’t come from one headline, but rather from a series of small developments that tilt risk appetite.
