From Marc Chandler at Bannockburn Global Forex:
Overview: The US dollar is consolidating its recent gains against the G10 currencies in quiet and relatively uneventful turnover. There continue to be mixed signals about the US tariffs threatened for next week. President Trump himself said that auto tariffs were coming soon as in days, while suggesting that there may be "a lot" of carve-outs from the reciprocal tariffs. EU's trade representative Sefcovic is meeting with US Commerce Secretary Lutnick today and a US delegation is in India today to talk trade. The greenback mixed against emerging market currencies. The Mexican peso was the strongest yesterday, gaining 1% against the greenback and is marginally stronger today. Of note, the offshore yuan is lower for the sixth consecutive session, its longest losing streak in about 2 1/2 years and the PBOC set the dollar's reference rate higher for the fourth consecutive session. It seems to be signaling an acceptance of a weaker yuan, perhaps given the tariff threats, which were extended yesterday to include buying Venezuelan oil and gas.
While most of the bourses in the Asia Pacific region rose, including Indonesia, where the weakness of the rupiah spurred central bank intervention today, the Hang Seng and mainland shares that trade there, tumbled more than 2%. The Stoxx 600 in Europe is trying to snap a three-day decline, while US index futures are paring yesterday's strong gains. Benchmark 10-year rates are 2-5 bp higher in Europe, while the 10-year US Treasury yield is edging higher for the third consecutive session. If sustained, it would be the longest advance this month and at 4.35%, it is the highest level since late February. Gold is firm, holding above $3000, but below yesterday's high ($3033). May WTI is extending yesterday's 1.2% advance at near $69.50 is at its best level since March 3 as it extends the rally into the fifth consecutive session.
USD: The Dollar Index held last Friday's low in the yesterday's pullback and was better bid in North America. After falling from a peak near 110.20 on January 13, DXY has carved out a bottom this month near 103.20. It reached almost 104.45 yesterday and posted its highest close since March 3. It is trading firmly but quietly today....
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