French vote in focus

Sine earlier this week, the Dollar is holding above lows against its peers. The US currency is trading with a broadly defensive tone as economic data lowered outlook for interest rate hikes and the Beige Book showed the US economy expanded at a modest to moderate pace. The IMF warned that Trump’s proposed tax cuts and roll-back of financial regulations could spark a new round of financial risk-taking of the type that preceded the last crisis in 2008. Meanwhile, investors remain cautious, awaiting this weekend’s first round of voting in France’s presidential election.

Polls indicated that Emmanuel Macron held on to his lead as favorite to arise as the eventual victor, although it showed that the outcome of the first round of voting was too close to call. Millions of French voters remain undecided, making this the least predictable vote in France in decades, and raising fears of a surprise result that could spread turmoil in markets.

Yesterday, the Yen strengthened after data showed Japan’s exports rose in March at the fastest pace in more than two years, though fears of trade friction clouded the outlook. Deputy Prime Minister Taro Aso, who heads Japan for a newly created bilateral dialogue with the US, said that Japan has less room to compromise with the US under a bilateral trade deal.

Meanwhile, Oil prices dropped more than $2 a barrel since Wednesday after data showed an unexpected rise in US Gasoline stockpiles for the first time since February and estimates showed American Crude production had hit its highest level since mid-2015. The EIA said that Gasoline inventories rose by 1.5m barrels in the week of April 14, beating outlooks of a drop of 1.9m barrels.