The U.S. dollar held firm at the start of the week as traders geared up for a series of key economic reports that could reveal whether President Donald Trump’s trade policies are starting to impact the economy.

Against the yen, the dollar traded at 143.57, and it stood at $1.1360 per euro. Although the greenback has recently stabilized, it remains on track for its biggest monthly decline in over two years, as investor confidence in U.S. assets wavers amid trade tensions.

Through April, the dollar has dropped more than 4% against both the euro and the yen. However, it regained some ground late last week following signs of a more conciliatory tone between Washington and Beijing.

There were indications of a slight easing in tensions, with the U.S. hinting at possible tariff reductions and China offering exemptions on some imports from its 125% tariffs. Yet, while President Trump claimed progress in discussions with Chinese President Xi Jinping, Beijing refuted the existence of ongoing negotiations. Meanwhile, Treasury Secretary Scott Bessent refrained from confirming any active talks during his comments on Sunday.

Market Awaits U.S. Jobs and Growth Data for Signs of Tariff Impact

“The key question now is whether this market volatility is starting to affect real-world decisions, particularly in U.S. employment,” noted Chris Turner, ING’s global head of markets.

Investors are awaiting Friday’s U.S. nonfarm payrolls report, where a significant slowdown in job creation is anticipated. Also on the radar this week are U.S. first-quarter GDP figures and the Fed’s preferred inflation metric, the core PCE price index. Europe is scheduled to release GDP and preliminary inflation data as well.

In Australia, an inflation reading on Wednesday is unlikely to shift market expectations for an interest rate cut next month. The Australian dollar stayed near its recent highs, trading just below $0.64, while the New Zealand dollar hovered close to $0.60.

“AUD/USD might break resistance at 0.6464, although that level has proven tough to surpass this month,” wrote Joe Capurso, strategist at Commonwealth Bank of Australia, in a client note.

Political Events Keep Currency Traders on Alert

Canada is heading to the polls on Monday. The ruling Liberal Party holds a slight lead according to polls, and a more comfortable margin based on online prediction markets. Currency traders are not anticipating major volatility, as reflected by the Canadian dollar’s stable position at C$1.3874 against the greenback.

Meanwhile, the Bank of Japan will announce its monetary policy decision on Thursday. Although no changes are expected, market participants will closely watch policymakers’ economic outlook, particularly given upcoming U.S.-Japan trade discussions, which may involve currency issues.

Adding to the intrigue, Japan’s top currency official, Atsushi Mimura, on Monday denied a Yomiuri newspaper report claiming that Treasury Secretary Bessent expressed a preference for a weaker dollar and a stronger yen during bilateral meetings.