Forex Today: Dollar rally picks up steam on risk-aversion

Here is what you need to know on Monday, April 25:

With safe-haven flows dominating the financial markets at the start of the week, the greenback continued to gather strength against its major rivals and the US Dollar Index (DXY) reached its highest level in more than two years at 101.73 early Monday. Reflecting the risk-averse market atmosphere, US stock index futures are down between 0.7% and 0.8% and the benchmark 10-year US Treasury bond yield is losing more than 2%. IFO business sentiment survey from Germany will be featured in the European economic docket before the Federal Reserve Bank of Chicago releases the National Activity Index for March later in the day.

Investors grow increasingly concerned over the global economy slowing down amid the protracted Russia-Ukraine conflict, coronavirus-related lockdowns in China and the major central banks' willingness to tighten their policies at an aggressive pace. 

Ukrainian presidential adviser Mykhailo Podoloyak said over the weekend that Russian forces were "continuously attacking" the steel plan in Mariupol, where the Ukrainian forces are holding out.

EUR/USD opened with a bullish gap as investors reacted to Emmanuel Macron's victory in the second round of French elections but quickly reversed its direction. After touching its weakest level since March 2020 near 1.0700 during the Asian trading hours, the pair recovered a small portion of its daily losses but was last seen trading deep in negative territory below 1.0750.

GBP/USD lost 1.5% on Friday after the British pound came under heavy selling pressure on disappointing macroeconomic data releases from the UK. The pair stays on the back foot early Monday and trades at its lowest level in nearly 20 months at around 1.2730.

Gold is having a difficult time finding demand at the start of the week despite falling US Treasury bond yields. XAU/USD is trading below $1,920 early Monday, dragged by the broad-based dollar strength.

USD/JPY is edging lower as the Japanese yen attracts investors as a safe haven. Speaking at the IMF event on Friday, Bank of Japan (BoJ) Governor Haruhiko Kuroda said that the BoJ should persistently continue with the aggressive monetary easing.

Bitcoin fluctuated in a relatively tight range during the weekend but extended its slide after breaking below $40,000 early Monday. BTC/USD was last seen losing more than 2% on a daily basis at around $38,500. Ethereum closed the previous five days in negative territory and fell sharply toward $2,800 at the start of the week.