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[MARKET ANALYSIS] DXY softens, Antipodes outperform, JPY lags as Japanese markets remain closed

The DXY's recent softening indicates a weakening USD, largely influenced by President Trump's announcement regarding Project Freedom, which has created an opportunity for both the EUR and GBP to regain strength against the dollar.

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[MARKET ANALYSIS] DXY softens, Antipodes outperform, JPY lags as Japanese markets remain closed

Chinese RatingDog Composite PMI (Apr) 53.1 (Prev. 51.5)

Chinese RatingDog Services PMI (Apr) 52.6 vs. Exp. 52.0 (Prev. 52.1)

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  • DXY trades on the backfoot, gapping lower and continuing to hold at the lower end of its 98.23-98.34 range, after US President Trump posted that Project Freedom is to be paused for a short period of time, however, caveated that the blockade is to remain in place. 
  • EUR/USD regained the 1.1700 handle following the Trump announcement and extended higher, currently just shy of the 1.1726 session high. Markets will be looking ahead to the final EZ PMIs, although market reaction is expected to be limited. 
  • GBP/USD, similarly, benefits from the pause of Project Freedom and trades at the upper end of a 1.3531-1.3580 range. 
  • USD/JPY lags behind its G10 peers as it finds support around the 157.50 handle. Analysts suggest that, despite the drop from beyond 160 to mid-150s, the recent move looks more like a positioning reset rather than a structural shift in direction and with energy prices lower and US yields higher, this indicates a worrying sign for Japanese officials. 
  • Antipodeans outperform, benefiting from the risk-tone sentiment. AUD/USD has now reached levels not seen since June 2026.
Context

Meanwhile, the JPY is lagging, showing possible vulnerability amid higher US yields and declining energy prices, signaling concerns for Japanese authorities about the currency’s outlook. The strong performance of the Antipodeans suggests a prevailing risk-on sentiment, which could shape cross-asset strategies moving forward.

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