FX Markets Navigate Trade Tensions and Policy Shifts Amid Currency Volatility

Global forex markets are experiencing heightened volatility as traders navigate escalating trade tensions, significant policy decisions, and sharp currency movements. The dollar index (DXY) fluctuates near 104.50 as markets digest mixed signals from various economic regions. Trade dispute concerns between major economies have intensified safe-haven flows, benefiting the Japanese yen and Swiss franc, with USD/JPY declining 0.5% and USD/CHF dropping 0.3%. Meanwhile, commodity currencies face pressure, with AUD/USD and NZD/USD both retreating amid risk-off sentiment. Central bank policy divergence remains a key theme, as the Federal Reserve maintains its hawkish stance while other major banks consider easing measures. Technical indicators suggest increased volatility ahead, with major pairs testing key support and resistance levels. Traders are advised to monitor geopolitical developments closely, as any escalation in trade tensions could trigger further currency swings throughout the week.