Forex & Currency Watch — 2026-04-25

---

Market Snapshot

Prices as of Apr 24–25 session.

---

Top Movers

Winners and Losers — April 24–25

• GBP/USD — Winner, +0.48%. Sterling led G10 gains on the day, reaching as high as 1.3539 intraday, as broad dollar softness combined with relatively firm UK economic sentiment lifted cable through recent consolidation.

• NZD/USD — Winner, +0.41%. The kiwi was the second-strongest performer among majors, touching 0.5885 intraday as risk appetite improved on eased geopolitical tensions, with the pair enjoying its best single-session move in over a week.

• USD/HUF — Loser (HUF strongest vs USD), −0.75%. The Hungarian forint was the single biggest gainer on TradingEconomics's major grid, with USD/HUF falling to 311.79, as the broader dollar softening boosted high-beta EM currencies.

• USD/ILS — Loser (ILS strongest), −0.82%. The Israeli shekel surged against the greenback — USD/ILS falling to 2.979 — as the U.S. and Iran agreed to resume peace talks, reducing the immediate risk premium that had been embedded in regional safe-haven flows.

---

What Moved the Tape

• U.S.–Iran peace talk agreement. The dollar slipped on Friday after the United States and Iran agreed to pursue further diplomatic talks, reducing immediate safe-haven demand for the greenback. USD/ILS fell −0.82% as the regional risk premium unwound sharply, and haven demand for the dollar broadly eased. The move pushed DXY toward 98.50 and supported EUR/USD in its 1.1600–1.1800 range.

• DXY holds firm on weekly basis despite Friday softness. Despite the daily pullback, the Dollar Index is still set for a weekly gain of approximately +0.49%, having held near the 98.60 zone through much of the week as lingering uncertainty over U.S.-Iran conflict kept investors favoring the greenback. USD/JPY remained coiled just below the 160 level — technically significant — as price consolidated near recent highs.

• Carry trade revival on falling volatility. With market volatility receding, the carry trade regained momentum during the week — a tailwind for high-yielders like the Australian and New Zealand dollars. AUD/USD posted a +2.85% gain over the month and is up over 7% year-to-date, while NZD/USD gained +1.16% on the week.

• USD dollar swap-line discussions with Gulf and Asian partners. U.S. Treasury Secretary Bessent disclosed ongoing talks about dollar swap lines with Gulf and Asian partners, a signal of sustained dollar demand in global trade infrastructure. Separately, Bloomberg reported that dollar use in global trade rose to new highs amid the ongoing Middle East conflict.

---

Central Bank Watch

• Federal Reserve. The Fed remains in a holding pattern. Markets are in wait-and-see mode ahead of the upcoming FOMC meeting, with the central bank's "data-dependent" stance unaltered. DXY is losing momentum near 98.50 as traders unwind part of the recent dollar rally "despite still strong US data." No Fed speakers crossed the tape with fresh policy signals in Friday's session, sustaining EUR/USD within its established 1.1600–1.1800 range.

• Bank of Japan. USD/JPY remains pinned below the technically pivotal 160 level, consolidating in the 157–160 range. Analysts at ActionForex note that a break above 160.45 would target a retest of the 161.94 high, while the 157.49 cluster support (38.2% Fibonacci retracement of the 152.25–160.45 range) has held firmly, suggesting the BOJ's implicit tolerance range for yen weakness remains a factor. EUR/JPY is trading in the 186–188 zone.

• European Central Bank. The ECB is also in a watchful stance ahead of its next decision. EUR/USD is consolidating broadly within 1.1600–1.1800, with the pair gaining +0.33% on the day but remaining "range bound" pending clearer rate-path guidance. EUR/GBP slipped −0.15% to 0.8663, with the pair's one-month change sitting at just +0.19% — a sign that neither the ECB nor BOE is seen dramatically diverging from current policy.

• Reserve Bank of Australia / RBNZ. The Australian and New Zealand dollars are among the top year-to-date gainers in G10, with AUD/USD up +7.08% YTD and +11.74% year-on-year (TradingEconomics data). Easing volatility and the carry trade resurgence favor both antipodean currencies, and market participants will watch whether the RBA shifts its language at its next meeting.

---

Emerging Markets & Asia FX

• USD/CNY — 6.8320 (−0.04% daily, +0.23% weekly). The Chinese yuan edged higher versus the dollar, with USD/CNY testing near 6.83 as the PBOC's daily fixes continue to guide the currency. Year-to-date, the yuan has appreciated −2.07% versus the dollar (i.e., CNY is stronger), making it one of the steadier Asian currencies amid broader EM volatility. Dollar swap-line discussions between the U.S. Treasury and Asian partners add a structural dimension to yuan demand dynamics.

• USD/KRW — 1,477.21 (−0.30% daily, +0.69% weekly). The South Korean won firmed on the session, pulling USD/KRW back from recent highs. On a monthly basis, USD/KRW is still down −1.88% — reflecting that the won has appreciated alongside broader Asia FX. ING's Asia FX outlook had flagged the Korean won as having significant room to appreciate, a thesis playing out in 2026.

• USD/INR — 94.253 (+0.17% daily, +1.78% weekly). The Indian rupee weakened modestly on the day and is notably softer on the week (+1.78% in USD/INR terms, meaning rupee depreciation). With year-to-date USD/INR up +4.88% and year-on-year up +10.39%, the rupee faces persistent pressure, in contrast to most other Asian currencies. The EURINR cross is eyeing 109/108 before potentially recovering toward 110–112, per FXStreet analysis.

• USD/MXN — 17.391 (−0.16% daily, +0.46% weekly). The Mexican peso remains one of the stronger performers in EM on a YTD basis, with USD/MXN down −3.49% this year and −10.84% year-on-year, meaning the peso has significantly appreciated. The monthly gain of −2.13% in USD/MXN underscores the carry trade momentum, though the pair ticked slightly higher on the week.

---

Strategist Takes

• Dan Tobon, Head of G10 FX Strategy, Citi (New York): Tobon has maintained a bullish dollar view against the consensus bearish narrative, stating "We are dollar bulls in a world of dollar bears right now." Citi sees the dollar strengthening at least through Q3 2026, especially against the euro, Canadian dollar, and sterling, even accounting for headwinds such as hedging of dollar exposures by foreign investors and concerns about Fed independence. This call stands in contrast to the Friday session's dollar softness, which Tobon's team would likely characterize as a tactical pause rather than a trend reversal.

• Eric Merlis, Co-Head of Global Markets, Citizens (Boston): Taking the opposing view, Merlis confirmed Citizens is running a short-dollar position relative to other G10 currencies. "Although the market expects limited action from the Federal Reserve next year, we believe the trend is toward lower growth and weaker employment," he said, citing structural headwinds that would weigh on the dollar through the year. The Friday session's DXY drift to 98.50 is consistent with Merlis's bearish thesis, particularly as central bank meetings approach.

---

What to Watch Next

1. FOMC Rate Decision (next 1–3 sessions) — Most sensitive pair: EUR/USD, DXY. Markets are in explicit "wait-and-see" mode ahead of the next Federal Reserve decision. Any shift in language around the rate path — whether toward cuts or a more hawkish hold — could break EUR/USD out of its 1.1600–1.1800 range. A dovish surprise would accelerate the bearish DXY trend; a hawkish hold could push DXY back toward 99+.

2. ECB Rate Decision (upcoming week) — Most sensitive pair: EUR/USD, EUR/GBP. The ECB's next meeting is also on traders' radar. EUR/USD's current consolidation range has been explicitly tied to "markets eyeing central bank meetings." An ECB signal toward pausing or hiking could catalyze a EUR breakout above 1.1800.

3. USD/JPY Break Above 160 or Failure (ongoing) — Most sensitive pair: USD/JPY, EUR/JPY. The 160 level is flagged as a critical technical juncture. ActionForex notes that a decisive break of 160.45 would target the 161.94 prior high. The BOJ's response (verbal or intervention) to any clean break above 160 is a key event risk for yen pairs.

4. U.S.-Iran Diplomatic Developments (rolling) — Most sensitive pairs: USD/ILS, Oil-linked FX (NOK, MXN, CAD). Friday's peace-talk agreement triggered the session's biggest individual-pair move (USD/ILS −0.82%). Any deterioration or breakthrough in negotiations will ripple through haven flows, oil prices, and accordingly commodity-linked currencies. USD/NOK is already down −3.48% on the month and −10.34% year-on-year, tracking the oil-risk premium narrative.

---

Reader Action Items

1. Watch EUR/USD at 1.1800 resistance and 1.1600 support. The pair is explicitly range-bound ahead of Fed and ECB decisions. A clean break above 1.1800 — particularly if driven by a dovish Fed — could trigger the next leg higher. Conversely, a hawkish Fed hold could push the pair back toward 1.1600. Size positions accordingly and avoid leaning hard in either direction until after the meetings.

2. Monitor USD/JPY below 160 with tight stops above 160.45. The yen coiling pattern below 160 is a classic breakout setup. If U.S. rates stay elevated and the BOJ remains passive, a break above 160.45 could accelerate rapidly toward 161.94. Conversely, any BOJ intervention language or surprise hike signal would punish long USD/JPY positions sharply.

3. AUD and NZD carry-trade positions deserve a risk check. AUD/USD is up +7% YTD and NZD/USD has outperformed all week on carry momentum. With central bank meetings ahead, a risk-off shock — or a hawkish Fed repricing — could unwind these carry longs quickly. Consider whether carry positions are sized for a "surprise volatility spike" scenario.