The upcoming Federal Reserve monetary policy meeting, scheduled to conclude on April 29, is a focal point for global currency markets, with Chair Jerome Powell set to deliver his final press conference before his term expires on May 15 [1][2][3]. The Fed is widely expected to hold the federal funds rate at 3.50% to 3.75%, with no Summary of Economic Projections released this month, leaving the statement and press conference to shape market sentiment [1][2]. March headline inflation in the US reached a two-year high of 3.3%, and Q4 2025 GDP was revised to just 0.5% [1][2]. Key US data releases this week include Thursday's advance Q1 GDP (consensus 2.2%), Core PCE (forecast 3.2% YoY), and Friday's ISM Manufacturing PMI [1][2]. The Senate Banking Committee is also set to vote on Kevin Warsh's nomination as Powell's successor on Wednesday, introducing leadership-transition risk for the US Dollar [1][2].
In New Zealand, the NZD/USD pair climbed around 0.4% on Monday, settling near 0.5905, driven by a hotter-than-expected Q1 CPI print that pushed market pricing for a Reserve Bank of New Zealand (RBNZ) rate hike at the May meeting from below 30% to roughly 60%, with a July move now fully priced [1]. The ongoing Strait of Hormuz blockade is contributing to higher imported energy costs, and policymakers expect Q2 inflation pressures to intensify [1]. Upcoming domestic catalysts include RBNZ Deputy Governor Karen Breman's speech and the ANZ Roy Morgan Consumer Confidence reading [1].
The Australian Dollar (AUD/USD) rallied 0.53% on Monday, trading at 0.7185, as easing war fears and positive Wall Street sentiment buoyed risk appetite [3]. Iran proposed a three-step negotiation process to Washington to end the conflict, including reopening the Strait of Hormuz, which has been a key factor in recent market volatility [3]. US President Donald Trump canceled his envoy’s trip to Pakistan, and is reviewing Iran’s proposal with his national security aides [3]. The Australian economic docket is quiet until Wednesday's inflation figures from the ABS [3]. The AUD has been the strongest major currency against the Japanese Yen this month, up 4.40% [3].
The Japanese Yen (USD/JPY) remained largely unchanged near 159.40, consolidating below the 160.00 level ahead of Tuesday's Bank of Japan (BoJ) policy decision [2]. The BoJ is expected to hold its policy rate at 0.75%, with markets now pricing a likely move to 1.00% at the June meeting [2]. Updated forecasts are anticipated to lift core inflation projections above the 2.0% target, and Thursday's Tokyo CPI print (ex-fresh food forecast at 1.8% YoY) is the next domestic catalyst [2]. Finance Minister Satsuki Katayama reiterated that authorities retain a "free hand" to intervene to stabilize the Yen, with 160.00 acting as a soft intervention threshold [2].
CONCLUSION
Currency markets are closely watching the Fed's policy meeting, with expectations of a rate hold and leadership transition risk influencing the US Dollar. The NZD and AUD have rallied on domestic inflation and easing geopolitical tensions, while the JPY remains stable ahead of the BoJ decision. Upcoming economic data and central bank actions are likely to drive further volatility across major currency pairs.