- Iran resumes attacks on Israel
- Oil prices consolidating yesterday’s losses
- The US dollar opens with gains across the board.
USDCAD open: 1.3741, overnight range 1.3722-1.3762, close 1.3721, WTI 90.29, Gold 4426.31
The Canadian dollar had a chaotic session yesterday, but settled down overnight, albeit under renewed pressure. The currency direction remains at the mercy of global risk sentiment and at the moment, that sentiment favours US dollars.
Iran denied any talks with Trump and continued its offensive, targeting sites in Israel and US bases across the region, which helped revive demand for US dollars against the G-10
WTI prices climbed from $88.94 to $92.26 overnight and are up 2.26% on the day. At the same time, the prospect that tensions could ease has contributed to an 8.0% drop in oil prices over the past five sessions.
Chicago Fed President Austan Goolsbee has pivoted from last week’s tone and is now warning that higher oil prices could force the Fed’s hand toward rate hikes. At the same time, Trump’s Fed ally Stephen Miran is sticking to the script, arguing for four rate cuts this year on the assumption policymakers will ignore energy-driven inflation. The messaging split leaves markets with no clear anchor.
Asian equities managed to recover some of the prior session’s damage. Japan’s Topix gained 2.10% and Hong Kong’s Hang Seng rose 2.79%, while Australia’s ASX added 0.16%.
As of 7:30 am, European bourses are mixed to slightly lower. Germany’s DAX is off 0.37%, the UK FTSE 100, the French CAC 40 and S&P 500 futures are flat. The US 10-year yield is 4.365%, and the DXY is at 99.27.
EURUSD is marking time after yesterday’s rally, holding inside a 1.1576-1.1618 band. Weak Eurozone PMI data, which slipped to a 10-month low at 50.5 from 51.9, barely registered as traders focused on geopolitics. The slowdown is being linked to the fallout from the Iran conflict. Separately, a new EU-Australia agreement improves European access to critical minerals while opening consumer markets for Australian exporters.
GBPUSD is trading with a nervous tone between 1.3380 and 1.3446 as soft UK data collides with stronger dollar demand. The S&P Composite PMI dropped to 51.0 from 53.7, with Services at 53.2 from 53.9 and Manufacturing at 51.4 from 51.7. Survey responses highlighted a clear slowdown in activity growth tied to Middle East tensions, rising costs, and supply disruptions. Forward-looking expectations also weakened, pushing optimism to its lowest level since June 2025 and all but removing the case for a near-term BoE rate cut.
USDJPY held a steady 158.28-158.79 range and remains underpinned by safe-haven demand for dollars tied to the Iran situation. Markets largely ignored BoJ Governor Ueda’s remarks about a moderate pickup in inflation, along with softer PMI readings. Flash data showed slower growth across both manufacturing and services, resulting in the weakest expansion in private sector output in three months.
AUDUSD is under pressure, trading in a 0.6923-0.7024 range as risk aversion dominates. Australia’s PMI data disappointed across the board, with the Composite index falling to 47.0 from 52.4, Services to 46.6 from 52.8, and Manufacturing to 50.1 from 51.0. The data point to a loss of momentum heading into the end of the first quarter, reinforcing the cautious tone around the currency.
