USD/CAD holds firm on Tuesday as the US Dollar (USD) steadies after recent weakness, although the pair lacks strong upside momentum as elevated Oil prices provide underlying support to the commodity-linked Canadian Dollar (CAD).

Rabobank’s Global Strategist Michael Every highlights a complex European backdrop for the Euro (EUR), with Ukraine’s battlefield gains, EU financing plans, and internal political splits.

Scotiabank strategists Shaun Osborne and Eric Theoret observes the Canadian Dollar (CAD) is modestly softer as USD stabilizes, but stresses the broader USD/CAD bear trend remains intact.

USD/JPY edges higher on Tuesday, supported by a modest rebound in the US Dollar (USD) as market sentiment turns risk-averse.

NZD/USD trades around 0.5900 on Tuesday at the time of writing, up 0.20% on the day, extending its rebound from the lows near 0.5850 recorded on Monday.

The AUD/USD fell near the 0.7160 level on Tuesday, maintaining a constructive tone as the US Dollar (USD) gained momentum amid destabilizing risk sentiment.

GBP/USD retreats, losing 0.18%, as the US Dollar recovers following a solid US Retail Sales report. Data in the UK reveals the labor market remains solid, while traders digest headlines from the Fed Chair nominee, Kevin Warsh, at the US Senate.

EUR/USD trades under pressure on Tuesday as the US Dollar (USD) steadies after recent weakness, with upbeat US economic data and weaker Eurozone sentiment adding further downside pressure on the Euro (EUR).

Rabobank’s Senior FX Strategist Jane Foley argues that UK politics, including questions over Prime Minister Starmer’s position and Labour’s prospects in May elections, will weigh on GBP sentiment.

EUR/GBP trades on the back foot on Tuesday, with the British Pound (GBP) outperforming the Euro (EUR) following broadly resilient UK labor market data, while softer economic sentiment from the Eurozone adds further pressure on the Euro.

Brown Brothers Harriman’s (BBH) Elias Haddad reports that NZD is outperforming after hotter-than-expected Q1 Consumer Price Index (CPI), with headline inflation at 3.1% y/y versus the RBNZ’s 2.8% projection.

Rabobank’s Senior FX Strategist Jane Foley highlights that UK political uncertainty around Labour leadership and upcoming May elections could distract GBP markets this spring. She links GBP’s earlier outperformance to a sharp repricing of Bank of England (BoE) expectations, now partly unwound.

The Pound Sterling (GBP) demonstrates a mixed performance against its major currency peers during the late European trading session on Tuesday.

The US Dollar (USD) posts moderate gains against the Japanese Yen (JPY) on Tuesday, with price action returning above 159.00 after bouncing up from 157.59 lows on Friday. The pair, however, remains bouncing back and forth within a broadly 150-pip range, from 158.50 to the key 160.00 level.

Brown Brothers Harriman’s (BBH) Elias Haddad highlights that GBP/USD is trading near 1.3500 after a mixed United Kingdom (UK) labor report, with falling unemployment but weaker payrolls. Easing wage pressures below the BoE’s projections support renewed easing later this year.

The US Dollar (USD) shows marginal gains against the Canadian Dollar (CAD) on Tuesday, trimming losses after a six-day selloff. The USD/CAD pair has reached session highs right above 1.3660 but remains relatively close to the five-week lows of 1.3635 set the previous day.  

ING’s Chris Turner highlights strong foreign demand for Eurozone assets, with EUR280bn of equities and debt bought in the first two months of the year, which may be marginally supportive for the Euro (EUR).

EUR/JPY remains steady after modest gains registered in the previous day, trading around 187.20 during the Asian hours on Monday. The currency cross holds ground as the Euro (EUR) moves little following the release of German ZEW Survey data.

The AUD/USD pair trades 0.35% lower around 0.7150 during the European trading session on Tuesday.

Eurozone ZEW Survey – Economic Sentiment registered at -20.4, below expectations (-3.6) in April

Germany ZEW Survey – Economic Sentiment registered at -17.2, below expectations (-5) in April

Germany ZEW Survey – Current Situation below expectations (-70) in April: Actual (-73.7)

Commerzbank’s Volkmar Baur notes New Zealand inflation at 3.1% year-on-year, slightly above the Reserve Bank of New Zealand (RBNZ) target, and warns that higher energy prices could push it further. He sees a possible rate hike in late May, which might briefly support the New Zealand Dollar (NZD).

The Euro (EUR) extends losses against the US Dollar (USD) on Tuesday, reaching session lows right above 1.1750 at the time of writing after failing to extend Monday’s gains past 1.1790.

The USD/CHF pair trades 0.25% higher at around 0.7800 during the European trading session on Tuesday.

OCBC strategists Sim Moh Siong and Christopher Wong argue that Swiss Franc (CHF) safe-haven demand is being constrained by perceived Swiss National Bank (SNB) intervention risk.

The New Zealand Dollar (NZD) appreciates for the second consecutive day against the US Dollar (USD) on Tuesday, fuelled by stronger-than-expected New Zealand inflation figures and a moderate optimism about a resolution of the Middle East conflict.

United Overseas Bank’s (UOB) strategists Quek Ser Leang and Lee Sue Ann expect USD/JPY to remain range-bound after recent volatility. For the day, the pair is seen between 158.50 and 159.20, with flat momentum indicators. Over 1–3 weeks, UOB projects a 157.55–160.50 band.

Commerzbank analysts highlight that the Reserve Bank of India (RBI) has rolled back some Non-Deliverable Forward (NDF) restrictions, allowing authorized dealers to offer NDFs, roll over and cancel related-party contracts, and use back-to-back hedging.

Deutsche Bank’s Chief UK Economist Sanjay Raja assesses the latest United Kingdom (UK) labour market data as stronger on the surface but still fragile underneath. He notes the surprise drop in unemployment and softer wage growth, which may comfort the Bank of England (BoE).