USD Dominates, Everything Else Suffers

The EURUSD pair declined toward 1.07, the lowest level in two years, while the GBPUSD pair fell to 1.2750, the weakest since September 2020. Commodity currencies such as the AUD or NZD were down sharply as well.

Equities also suffered heavy losses as the selling continued, pushing US benchmarks toward their March lows, while EU bourses were deeply in red too. 

Sentiment remains bearish for most of the assets as the Fed has confirmed during the previous week that rates are going up sharply over the following months. 

Later today, German IFO surveys for April are due, projected to continue deteriorating, although not significantly. Moreover, the euro zone's construction output data will be released. 

During the US session, the Chicago Fed National Activity Index and the Dallas Fed Manufacturing Business Index are on the agenda. However, they rarely cause any market volatility.

Additionally, Bank of Canada Governor Tiff Macklem is due to testify, along with Senior Deputy Governor Rogers, before the House of Commons Standing Committee on Finance, in Ontario. Their testimony might influence the USDCAD pair. However, as long as it trades above 1.2650, the immediate outlook seems bullish.

In commodities, gold and silver suffered greatly over the previous days as the US dollar strength and advancing yields have finally awoken the bears. At the time of writing, silver was down 2% on the day, dropping below the 200-day average at 24 USD, while gold traded 1% weaker, heading toward the 1,900 USD level again. 

Oil also weakened, falling below the 100 USD threshold for the WTI benchmark. Finally, copped dropped 1.5% to one-month lows at 4.50 USD.