Should we be wary of further downside potential in the weakening U.S. dollar?

Should we be wary of further downside potential in the weakening U.S. dollar?

06.05.2025

In the U.S. currency market yesterday, the U.S. dollar was the weakest performer despite the April ISM Non-Manufacturing Index improving to 51.6 from 50.8 the previous month, as both the services and composite PMI figures for April, released on the same day, came in below expectations. The USD/JPY pair fell from 144.989 to 143.548, tracking a downward trend along the 20-period moving average on the hourly chart.On the weekly chart, the pair has once again fallen short of reaching the 10-day moving average.

Among European currencies, the pound rebounded against the euro. The EUR/GBP pair fell from 0.8532 to 0.8502. On the hourly chart, the price has moved from above the 20-period moving average (MA) to below it. On the 4-hour chart, the price is consolidating near the 200-period exponential moving average (EMA), while on the daily chart, it is currently searching for direction just below the 20-period MA. We will be watching closely to see if any clear price movement emerges during European trading hours.

Today’s economic indicators include Australian housing construction permits at 10:30, remarks by SNB Governor Schlegel at 16:35, the German non-manufacturing PMI at 16:55, the Eurozone non-manufacturing PMI at 17:00, the UK services PMI at 17:30, the Eurozone producer price index at 18:00, and the U.S. trade balance at 21:30.Canada’s International Merchandise Trade, 11:00 PM for Canada’s Ivey PMI, and 2:00 AM for the U.S. 10-year Treasury auction. We should remain highly vigilant regarding the downside potential of the weakening U.S. dollar.

Past Market Reports

1. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

2. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

3. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

4. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

5. 13.04.2026New

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

6. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

7. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

8. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

9. 07.04.2026

   Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran

10. 06.04.2026

    Investors should be wary of sudden spikes in volatility while major markets are closed