New York, NY – The US dollar is showing strength against most G10 currencies as the new week begins, with the exception of the euro. The euro remains steady around $1.07. Emerging market currencies are generally firmer, except for a few in the Asia-Pacific region like China, South Korea, and Taiwan. Equities in Asia Pacific markets, with the exception of India, have started softer, with Tokyo experiencing significant losses. In Europe, the Stoxx 600 is on track to extend losses for a third session, following a 2.4% decline last week, while the US S&P 500 saw a 1.6% increase. US index futures are mixed pre-market.

In Asia Pacific, China’s economic data paints a bleak picture, with property prices falling and industrial output slowing. Japan’s industrial production in April declined, but the tertiary industry index saw growth. The dollar-yen exchange rate is sensitive to changes in US interest rates. The Australian dollar is trading around $0.66, while the PBOC set the dollar’s reference rate at CNY7.1149.

In Europe, politics takes center stage with a focus on the jockeying for EC posts. Italy’s Meloni hosted a successful G7 summit, highlighting closer ties between the US and Europe. The euro is facing pressure amid political uncertainties in France and diverging interest rates between the US and Germany. Sterling also experienced selling pressure, with Farage’s Reform UK party leading in polls.

In America, the Empire State manufacturing survey is expected to contract for the seventh consecutive month. Industrial production and retail sales data are anticipated to show improvement, indicating a slowing economy. The CAD1.3780-CAD1.3800 cap for the US dollar is crucial, while the peso appears to be stabilizing. Central banks in Chile and Brazil are set to make policy decisions this week.