Dollar Dilemma: Uncertainty Lingers Amid Mixed Economic Signals

The dollar faces difficulties despite easing recession fears and a solid March payrolls report. Investors are wary, awaiting concrete signs of improved Sino-U.S. trade relations and navigating mixed signals from global central banks. Market positioning reflects ongoing concerns over U.S. policy swings and economic outlook.

The dollar struggled to maintain its standing on Monday, even though concerns about a U.S. recession slightly waned. Investors remain tentative, hoping for tangible signs of improved Sino-U.S. trade relations beyond mere hints from officials.

The robust March payrolls report bolstered the dollar by diminishing the likelihood of a Federal Reserve rate cut in June and suggesting a hawkish stance at this week's policy meeting. Michael Feroli, head of U.S. economics at JPMorgan, stated that the labor report underscores the Federal Open Market Committee's intention to keep rates steady.

Despite this, the dollar received only limited support from job data amid reduced Asian market activity due to holidays and conflicting signals from other global markets, leaving investors cautiously navigating the complex economic landscape.

(With inputs from agencies.)