Cautious trade is giving way to a push higher

All eyes turn to Jerome Powell on Wednesday for what could be his final FOMC policy meeting before he hands over the reins to Kevin Warsh – unless he chooses to stay on the board and bravely defend the central bank’s independence through uncertain geopolitical times.

MUFG’s FX team highlights that Bank of Japan (BoJ) rate-hike expectations for April have collapsed, even as Japanese inflation data surprise to the upside.

Cautious trade has given way to a fresh pullback in both USD- and CAD-driven trade

Scotiabank strategists Shaun Osborne and Eric Theoret observe the Canadian Dollar (CAD) strengthening decisively versus the Dollar, extending its typical April outperformance even as risk sentiment remains uncertain.

USD/JPY falls around 0.3% over two sessions, favoring the yen as BoJ decision expectations may reinforce downside pressure.

MUFG strategists say EUR/USD has retreated toward the middle of its 1.1400–1.2000 range as the Euro faces headwinds from the Middle East energy shock and weaker euro-zone PMIs.

ING’s Chris Turner highlights unusually low USD/JPY volatility despite multiple global risks and key central bank meetings. Their economists warn markets underprice the risk of a Bank of Japan (BoJ) rate hike and possible upward revisions to inflation forecasts.

Dxy, EurUsd, GbpUsd, UsdJpy, UsdCad, UsdChf, AudUsd, NzdUsd.

Consolidation around congestion support at 1.3450 has given way to a bounce