A quiet data calendar has allowed the dollar’s (USD) bearish trend to re-emerge. However, some USD-positive trade-related headlines may come out of the ongoing G7 summit in Canada, especially with speculation that the US might be discussing FX agreements with key trading partners.

Outlook for the USD
• Positive trade developments from the G7 could offer some support to the dollar.
• Yet, without stronger US data, any dollar rebounds are likely to be short-lived.
• DXY rallies above 100.0-100.5 may prove temporary.

EUR/USD: 1.150 Still Premature
• The euro continues to enjoy positive momentum, but the 1.150 level may be too optimistic for now.
• Markets are likely to treat 1.130 as a more realistic short-term target.
• USD-positive news from the G7 could cap further gains in EUR/USD.

GBP: Inflation Surprise May Be Misleading
• UK services CPI came in hotter than expected, but the spike is mainly due to road tax, airfare, and Easter-related timing effects.
• Core inflation trends remain subdued, supporting the view that the BoE will stay on its rate-cutting path.
• EUR/GBP could break below the 0.840 level in the coming weeks.

What’s Next?
• All eyes are on the G7 summit, as the headlines emerging from it could shape the near-term direction of the USD and other major currencies. In this environment, both macro fundamentals and geopolitical signals are playing a key role in FX markets.