Overview:  Many participants were focused on next week's US "reciprocal tariffs" when yesterday, it announced a 25% tariff on imported cars, effective April 3. Fully assembled vehicles are the first target, but by May 3, major parts, such as engines, transmissions, powertrain components and electrical systems will be included. The tariffs on Mexico and Canada will be adjusted based on the share of domestic content. A White House official suggested the tariff will raise as much as $100 bln a year, but economists are suspect this is grossly exaggerated. President Trump's aggressive offensi ..read more

Overview:  Uncertainty over next week's US tariff announcement continues weigh on markets and undermines near-term conviction. The dollar is mostly consolidating against the G10 currencies. Sterling is the heaviest, off about 0.3% after a soft CPI report and ahead of the Spring Budget Statement. The dollar bloc and Norwegian krone are the strongest. Among emerging market currencies, the Mexican peso roughly 0.25% loss puts it at the bottom of the performers today. The beaten-up Turkish lira is practically flat, but it appears to have little to do with President Trump's endorsement of Erd ..read more

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 th ..read more

Overview: Investors are finding some comfort in a signal from some senior US official that toned down the double-barrel threat of reciprocal and sectoral tariffs on April 2. The focus is said to be on the former, with some exemptions. Although the administration is two-months old, there have been many conflicting signals and there still is much uncertainty. After last week's gains, the greenback has begun the new week mostly softer against the G10 currencies, with the Japanese yen. Japan reported a sharp drop in the composite PMI, and it may be a rare occasion that the market reacted to it. A ..read more

After falling steadily since from the end of Q3 24 through the first part of January, the dollar stabilized last week, despite the dovish market takeaway from the Federal Reserve. The median projection for growth was shaved while the inflation project was raised. Still, despite the Atlanta Fed's GDP Now tracking a contraction here in Q1, few are that pessimistic. None of the 58 economists in Bloomberg's survey see a contraction, and only one estimate has growth below 2%. While many are talking about "stagflation," it seems exaggerated. The median Fed projection sees growth slowing but only to ..read more

Overview:  The dollar's down trend, which began at least a week before President Trump's second inauguration stalled this week, and preliminary technical signs suggest a bottom may be in the process of forming. The uncertainty over US reciprocal and sector tariff announcement on April 2 is boosting uncertainty among policymakers, investors, and businesses. The greenback is mostly firmer today and near the week's best levels against most of the major currencies. Emerging market currencies are mixed. The Turkish lira remains under pressure. It is off around 0.5% today and about 3.75% this ..read more

Overview:  The Federal Reserve's projections show a little more inflation and a little less growth this year and next, but the median projection showed, as it did in December, two rate cuts this year. This, coupled with the reduction of the balance sheet unwind of Treasury holdings (QT) gave a dovish cast to the FOMC outcome, though the dispersion of forecasts showed upside risks to inflation, and even the two rate cuts anticipated was a closer call than in December. The key take away is really a high degree of uncertainty. Still, the US dollar has returned today better bid. It is firmer ..read more

Overview: Often it is said that what the Fed does is more important than what it says. But this is not so today. There is little doubt that the Fed continues to remain on hold but it will updates its forecasts, and Chair Powell will likely reiterate his recent assessment that the economy is in a position that allows the central bank to be patient and wait for clearer signals of the impact of the administration's policies. The Summary of Economic projections may be the most important part of the forward guidance today. Ahead of the FOMC outcome, position-adjustment is the main theme today. Thi ..read more

Overview: The greenback remains under pressure and fell to new lows for the move against the euro, sterling, and the Norwegian krone. It is softer against nearly all the G10 currencies but the Japanese yen, where more disappointing data were reported and polls showed support for Prime Minister Ishiba plunged following his admission of doling out JPY100k (~$672) to 15 first-term LDP members of parliament. It makes for a poor backdrop for the upper house election in July. Most emerging market currencies are trading firmer.  Encouraged by the recovery in US equity indices yesterday, Asia Pa ..read more

Overview: The US dollar begins the new week quietly. The week features five G10 central bank meetings, and real sector data that may show the US economy is resilient despite the Atlanta's Fed's pessimism (which will be updated today). President Trump renewed his warning that reciprocal and sectoral tariffs will be announced on April 2. The greenback is trading with a mostly softer but consolidative bias today. Emerging market currencies are mixed, but of note the PBOC set the dollar's reference rate sharply lower (0.07%) and at its lowest level in four months. The official announcement of new ..read more