- Risk sentiment is positive ahead of weekend Middle East peace talks.
- Oil prices inch lower but stall at support
- The US dollar is trading on a mixed note but little changed from yesterday
USDCAD open: 1.3676 overnight range 1.3670-1.3709, close 1.3705, WTI 90.85, Gold 4789.75
The Canadian dollar traded with a bullish bias as commodity-linked currencies are back in favour, especially those with large, secure oil reserves outside the Middle East conflict zone. Improved risk appetite, driven by Trump’s comments about good progress ending the war in Iran and another round of Iran-US ceasefire talks this weekend, added to the downward pressure on the pair.
WTI prices slipped from 94.03 to 90.29 on optimism surrounding an extended ceasefire, but unless shipments move freely through the Strait of Hormuz, losses may be contained near the 86.00/b area.
The week is ending with a lack of top-tier economic data from Europe, the UK, the US, or Canada. As a result, markets remain fixated on the ceasefire discussions involving Iran, the US, Israel, and Lebanon.
Negotiators appear to be inching toward progress. Tehran is reportedly seeking the release of frozen assets, offering to ease restrictions on shipping through the Strait of Hormuz in return. The main obstacle remains Iran’s enriched uranium stockpile.
Speaking in Las Vegas yesterday, Trump dismissed current price pressures, saying inflation is “fake” and driven by energy costs. Meanwhile, Kevin Warsh’s confirmation hearing for Fed President is scheduled for April 21.
Asian equity markets ended the session on a softer note after weak guidance from Netflix weighed on technology shares. Japan’s Topix declined 1.41%, Hong Kong’s Hang Seng dropped 0.89%, while Australia’s ASX 200 finished little changed.
As of 7:05 am, Germany’s DAX is higher by 0.58%, France’s CAC 40 has gained 0.31%, while the UK’s FTSE 100 is down 0.24%. S&P 500 futures are up 0.21%, the US 10-year yield is at 4.296%, and the US dollar index sits at 98.12.
EURUSD was uneventful in a 1.1772-1.1799 range, consolidating recent losses but still holding onto gains of roughly 0.78% since last Friday, supported by modestly improved risk sentiment. ING analysts continue to expect a 25 bp rate increase from the ECB in June.
GBPUSD traded in a 1.3505-1.3540 range, pressured by renewed political controversy. Prime Minister Keir Starmer is facing fresh calls to step down after appointing Peter Mandelson as US Ambassador, despite reported security concerns.
USDJPY dropped to159.03 from 159.53 range, due to elevated US Treasury yields, fading safe-haven demand, and reduced expectations for a BoJ rate hike. Ongoing FX intervention risks are limiting upside.
AUDUSD drifted in a 0.7154-0.7183 range, holding steady on improved risk appetite and expectations for tighter monetary policy.
