The calendar only features a few key events that directly impact forex, so dollar traders are now focusing on the US equity markets.

US Dollar

The recent strength of the US dollar has drawn widespread attention. Not only have emerging market currencies like the Rupiah taken a hit, but the Japanese yen and South Korean won have also suffered. Last week, financial leaders from the United States, Japan, and South Korea even felt compelled to issue a joint statement on the matter, raising concerns about currency intervention risks.

While the USD rally paused after the statement, the US Dollar Index (DXY) remained above the 106.00 mark in Monday's trading (April 22). Future movements are likely to be influenced by developments in US equity markets.

According to Reuters, market volatility has decreased this week compared to the previous one. Market participants continue to digest signals from the Fed, hinting at intentions to keep interest rates low for an extended period, while also keeping an eye on the upcoming financial reports of major global companies. The decline in volatility is also attributed to reduced market concerns about the situation in the Middle East.

"The fact that the equities are up a little bit today as tensions ease a bit is what we're focused on," John Doyle, vice president of trading and dealing at Monex USA in Washington, said, "We're expecting a fairly easy day as we kind of put that in the rearview mirror and look toward the earnings season."

"FX has been center-stage for the last few weeks and might take a backseat this week as earnings take center-stage," XTB research director Kathleen Brooks said.

Several top US companies are set to release their financial reports this week, including Tesla, Meta, Microsoft, and Alphabet (Google). These reports often impact global economic forecasts and market sentiment, potentially affecting the forex market as well.

The forex calendar highlights three high-impact events: the release of US GDP data on Thursday, along with the US Core PCE Index and the Bank of Japan (BoJ) interest rate announcement on Friday. Several other events, such as the publication of Eurozone and US PMI survey results, Australian inflation figures, and the German IFO index, are expected to have a more moderate impact.