The U.S. Dollar is under pressure as weak economic data and rising global trade tensions fuel volatility across major forex pairs. AUD/USD and NZD/USD are showing signs of strength, while USD/JPY is slipping lower amid growing demand for safe-haven assets like the Japanese Yen.
The Australian Dollar (AUD/USD) posted gains for a second consecutive session, defying a weaker-than-expected trade surplus in April. Australia’s surplus dropped to $5.41 billion, down from $6.89 billion in March, as exports fell by 2.1% and imports climbed 3.3%, indicating slowing trade momentum.
However, upbeat Chinese Services PMI data (rising to 51.1 in May) helped support the Aussie, reflecting strong economic ties between China and Australia. The Reserve Bank of Australia (RBA) maintained a cautious tone in its latest communications, acknowledging external risks but refraining from immediate policy changes. Rate cuts remain possible but not imminent, which has lent further support to the AUD.
On the U.S. side, disappointing ISM Services PMI (dropping to 49.9) and ADP employment data (only 37,000 new jobs added in May) weighed heavily on the U.S. Dollar, pushing AUD/USD higher.
The New Zealand Dollar (NZD/USD) has formed a bullish structure, supported above the $0.5850 level. The pair is gaining traction amid continued U.S. Dollar weakness and risk-on sentiment. A decisive break above $0.6020 could confirm further upside potential.
The Kiwi remains sensitive to global commodity prices and Chinese demand trends, and with markets increasingly pricing in a Fed rate cut, NZD/USD could maintain its bullish momentum in the near term.
USD/JPY is trending lower after repeated failures to break resistance near 148.30. The pair now hovers near the critical 142.00 support level, amid growing economic concerns and renewed global trade tensions.
U.S. President Trump’s renewed push for higher tariffs on metals has escalated fears of a global slowdown, driving investors toward the Japanese Yen. Meanwhile, Japan’s relatively stable monetary stance and inflation trends continue to support the Yen’s resilience.
Technically, USD/JPY is moving within a descending broadening wedge pattern, and a break below 142.00 could open the door to 140.00 in the coming sessions, reinforcing the bearish trend.
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