ForexLive Asia-Pacific FX news wrap: USD opened week lower as Moody’s US downgrade weighs

• Fed’s Williams speaks Monday on economic outlook. Bostic, Logan and Kashkari speak also,
• China NBS spokesman (more): Will strengthen policy coordination
• China NBS spokesman (more): Foreign trade overcame difficulties, maintained steady growth
• Japan fin min Kato says Japan not facing problem getting funds via debt issuance
• Centrist Victory in Romania Defeats Far-Right Candidate: A Democratic Signal?
• US House panel approve Trump tax cut bill, setting up a possible vote on passage this week
• Japan Prime Minister Ishiba: Japan financial situation worse than Greece
• China Stats spokesman: contribution of consumption to eco growth will continue to increase
• Chinese officials say the economy is growing steadily in the face of pressure
• S&P 500 Analysis for Today by tradeCompass
• China Industrial Output April 2025 +6.1% y/y (expected 5.5%, prior +7.7%)
• BOJ DepGov Uchida Will keep raising interest rates if economy, prices improve as forecast
• China new home prices unchanged m/m in April, -4% y/y
• PBOC sets USD/ CNY reference rate for today at 7.1916 (vs. estimate at 7.2057)
• Japan’s Agriculture Ministry suspended imports of poultry from parts of Brazil – bird flu
• Japan PM Ishiba says again can’t accept US tariffs on autos
• Bitcoin hitting its highest since the end of January, circa USD106,400+
• ICYMI – Goldman Sachs: US tariffs may weaken the dollar as growth slows
• UK house price indicator shows smallest Springtime rise since 2016
• New Zealand Q1 PPI inputs and outputs both higher q/q
• New Zealand data: April Services PMI drops deeper into contraction at 48.5 (prior 49.1)
• Globex is open! US equity index futures drop. S&P500 (ES) down 0.7%. NASDAQ (NQ) down 0.9%
• Economic calendar in Asia 19 May 2025 – Chinese economic activity data for April
• Trade ideas thread – Monday, 19 May, insightful charts, technical analysis, ideas
• Binance and Kraken said to have been targets of Coinbase-like hack attacks
• Monday morning forex rates update – JPY and EUR higher
• Romanian centrist Presidential candidate ahead with 54.3% after 97% of votes counted
• Weekend: Bessent threatens tariff rates to return to ‘reciprocal’ levels if no trade deal
• Former President Joe Biden was diagnosed with an “aggressive form” of prostate cancer
• Eyes on Euro politics – Romania centrist Dan appears on course to win Romanian presidency
• Monday open levels, indicative FX prices, 19 May 2025

Weekend:

• The weekend news hasn’t been great for market confidence
• UK PM Starmer expected to announce Brexit ­”reset” deal on Monday. (Is Brexin the word?)
• Australian PM Albanese says he’s “up for a deal” with Europe on free trade
• ECB’s Lagarde:EUR/USD up justified by the uncertainty & loss of confidence in US policies
• European Central Bank Board Member Schnabel cautious on a June ECB rate cut
• ECB’s Kazaks: Rate cuts may be nearing end, but outlook still uncertain
• Newsquawk Week Ahead: UK-EU Summit, RBA, China Activity Data, Global PMI Data, Canada CPI
• Friday bombshell: Moody’s downgrades US credit rating
• Forexlive Americas FX news wrap: Hot UMich inflation expectations cool Fed rate cut talk

Markets reopened for the new week digesting the late-Friday US credit rating downgrade by Moody’s. The agency announced the move after US markets had closed, a decision some have called oddly timed—perhaps even irresponsible.

Opening FX trade saw a generally weaker US dollar, with the most notable move in USD/JPY, which fell more than 60 points from Friday’s close. EUR/USD also edged higher, with gains extending after Romania’s presidential election results came in. Pro-EU and pro-NATO candidate Dan won, defeating a far-right challenger. The outcome was interpreted as a win for EU political stability, lending the euro a modest boost.

As the session wore on, the dollar continued to soften a touch, the move was far from a rout.

US equity index futures gapped lower on the Globex open, as did US Treasury futures. As of writing, equity futures have slipped further.

China’s April data was the key focus for the session:

• Industrial output rose 6.1% y/y (vs. 5.5% expected, prior 7.7%)

• Retail sales grew 5.1% y/y (vs. 5.5% expected, prior 5.9%)

• Fixed asset investment was up 4.0% YTD (vs. 4.2% expected and prior)

• Surveyed jobless rate dipped to 5.1% from 5.2% in March

• House prices remained soft

Overall, the data were mixed. Industrial activity held up well, even as signs of weaker consumption and ongoing deflationary pressures linger. Trump’s tariffs have yet to cause significant damage, though slowing exports and falling bank lending suggest headwinds are mounting.

In Japan, Prime Minister Ishiba ruled out tax cuts funded by new debt, acknowledging that with market interest rates now positive, the country’s fiscal health is “worse than Greece.” Finance Minister Kato added that Japan is not facing problems issuing debt but warned that a loss of market trust could weaken the yen and trigger inflationary stress. JPY barely moved on the comments.

In the US, a House committee narrowly advanced President Trump’s tax cut package in a 17–16 vote on Sunday evening. Interestingly, four GOP “hardliners” who had opposed it earlier shifted their “no” stance to “present.” Hardliners? That label seems generous if they caved so easily—perhaps just political theatre.

Bitcoin has continued its ascent, climbing to fresh highs above USD 106,500.

Former US President Joe Biden has been diagnosed with an ‘aggressive form’ of prostate cancer that has metastasized to the bone, his office said in a statement, adding that ‘the cancer appears to be hormone-sensitive which allows for effective management’

We wish him well.

This article was written by Eamonn Sheridan at www.forexlive.com.