On Wednesday, April 9, the forex market was roiled as the US Dollar (USD) faced intense pressure against its major peers. The escalating global trade conflict stoked market fears, weighing heavily on the greenback. All eyes were on the upcoming release of the Federal Reserve (Fed) March policy meeting minutes, set for later in the American trading session.
Tuesday saw Wall Street’s main stock indexes open bullishly but end in the red. This shift highlighted investors’ reluctance to engage in a risk rally due to economic uncertainties. Early Wednesday, US stock index futures dipped, and the USD Index shed about 0.7% to hover around 102.20.
Trade War Developments and Central Bank Actions
Late Tuesday, US President Donald Trump accused China of Yuan manipulation to offset tariffs, after the USD/CNH pair hit a new high. He also expressed hope for a future trade deal. Meanwhile, Reuters reported that Chinese officials planned to meet on Wednesday to address Trump’s 104% tariffs on Chinese goods.
During Asian trading hours, the Reserve Bank of New Zealand (RBNZ) cut the Official Cash Rate (OCR) by 25 basis points to 3.5% and signaled potential further cuts. The NZD/USD pair initially dropped to a multi – year low but then reversed to trade in positive territory.
Currency Pair Movements
The EUR/USD pair gained on Tuesday and continued to climb on Wednesday, supported by dollar selling. It was up about 0.8% on the day, trading near 1.1050. The GBP/USD pair rebounded on Tuesday after a two – day slump and held above 1.2800 on Wednesday.
Gold, which was flat on Tuesday below $3,000, rallied on Wednesday morning. It benefited from risk – aversion, rising more than 2% above $3,040. The USD/JPY pair had a tough time, losing over 1% on Tuesday and extending its decline on Wednesday. It was down 0.6% on the day at 145.40. Bank of Japan Governor Kazuo Ueda said the bank would raise rates if the economy improved as expected.
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