Forex Today: US Dollar under pressure on trade war escalation, eyes on FOMC Minutes

Here is what you need to know on Wednesday, April 9:

The US Dollar (USD) continues to weaken against its rivals on Wednesday, pressured by growing fears over a further escalation in the global trade conflict. Later in the American session, the Federal Reserve (Fed) will publish the minutes of its March policy meeting.

Following a bullish opening on Tuesday, Wall Street's main indexes turned south and closed the day deep in negative territory as investors refrained from committing to a steady risk rally. Early Wednesday, US stock index futures trade marginally lower on the day, while the USD Index loses about 0.7% at 102.20.

US President Donald Trump said late Tuesday that China is manipulating the Chinese Yuan to offset against tariffs after the USD/CNH pair hit a new record high. Trump added that he expects to reach an agreement with China eventually. In the meantime, citing people with knowledge of the matter, Reuters reported early Wednesday that senior officials from China's State Council, several government and regulatory bodies plan to hold a meeting as early as Wednesday in response to Trump's 104% tariffs on Chinese goods.

During the Asian trading hours, the Reserve Bank of New Zealand (RBNZ) announced that it lowered the policy rate, the Official Cash Rate (OCR), by 25 basis points to 3.5%. In the policy statement, the RBNZ noted that a further reduction in the OCR is appropriate. After dropping to a multi-year low below 0.5500 in the Asian session, NZD/USD reversed its direction and was last seen trading in positive territory at around 0.5550.

EUR/USD registered modest gains on Tuesday and continued to stretch higher in the Asian session on Wednesday, supported by the broad-based selling pressure surrounding the USD. The pair was last seen rising about 0.8% on the day near 1.1050.

Following a sharp two-day decline, GBP/USD staged a rebound on Tuesday. The pair holds its ground early Wednesday and trades above 1.2800.

Gold failed to make a decisive move in either direction on Tuesday and closed the day flat below $3,000. XAU/USD benefits from risk-aversion early Wednesday and gains more than 2% on the day above $3,040.

USD/JPY lost more than 1% on Tuesday and extended its slide in the Asian session on Wednesday. At the time of press, the pair was down 0.6% on the day at 145.40. Bank of Japan (BoJ) Governor Kazuo Ueda said earlier in the day that they will continue to raise rates if the economy keeps improving in line with the outlook.