The Dollar Index failed to break its losing streak yesterday, extending it for the eighth consecutive session, thereby matching the longest decline since April 2011. The current trend could conclude today if the dollar maintains its upward momentum. In light of the stronger than anticipated GDP figures from the UK and China, alongside a robust jobs report from Australia, the US dollar is exhibiting strength against the majority of G10 and emerging market currencies. Risk appetites appear to remain strong, as the Nikkei mirrors the US S&P 500 and Nasdaq, reaching record highs. A potential two-week extension in the US-Iran ceasefire could have positively influenced sentiment. However, given the blockade of Iranian ports, certain forecasts indicate that storage capacity may be depleted within a two-week timeframe. The two-week extension would increase pressure on Tehran. Meanwhile, President Trump indicated that the investigation into the Federal Reserve will persist, acknowledging that this may postpone the confirmation of Kevin Warsh to succeed Powell.

The implications of an incomplete confirmation by the end of Powell’s term as chair remain uncertain. However, the president’s warning regarding the potential dismissal of Powell has been acknowledged, yet seemingly overlooked. The euro maintained its position above $1.1770 yesterday, with much of the North American afternoon spent hovering around the $1.1800 level. The level approached nearly $1.1825, aligning with the (61.8%) retracement target of the euro’s drop from the peak observed last January (~$1.2080). Sellers responded by driving it down to nearly $1.1770. Initial support is positioned close to the low observed yesterday, followed by the level of $1.1755. The dollar maintained its position above Monday’s low (~JPY158.60) against the yen yesterday, yet faced resistance just before reaching the 20-day moving average, which was located slightly below JPY159.20. The asset experienced a decline to a six-day low around JPY158.25 at first, seemingly influenced by the implied warning from Japan’s Finance Minister Katayama. Following a meeting with US Treasury Secretary Bessent, he indicated that officials were ready to implement “bold action” to bolster the yen. However, the dollar has managed to recover, moving slightly above JPY159 during European trading hours. During the course of the month, there has been a single minor breach of the JPY158-JPY160 range.

Sterling was restricted to approximately one-third of a cent beneath $1.3580 yesterday. It concluded the day with minimal variation in a lackluster trading session. Monday’s high was approximately $1.3590, just under the (61.8%) retracement of the pound’s drop since the late January peak (~$1.3870). It achieved a new two-month peak today prior to the stronger than anticipated February GDP (0.5%) and has since declined. It has been traded below yesterday’s low (~$1.3545). Initial support is identified in the $1.3500-25 range. Options totaling approximately GBP307 million at a rate of $1.3520 are set to expire today. The Canadian dollar exhibited resilience yesterday, concluding the day on a strong note. The US dollar remained just under Monday’s peak (~CAD1.3795) during early trading in North America.

The asset exhibited a downward trend for the majority of the session, breaching Monday’s low of approximately CAD1.3730 during the afternoon in New York. The value fell beneath CAD1.3715, marking the lowest point since March 23. It has stabilized during the European morning and returned to the range observed yesterday. The CAD1.3740-60 zone presents the first obstacle. The Australian dollar approached $0.7180 yesterday and continued to rise, nearing $0.7200 today, marking its highest level since mid-2022. The upward momentum failed to hold, resulting in the Aussie slipping past its closing levels and showing a slight decline for the day. Proximity to support could be observed at $0.7150, followed by $0.7125.