- Traders fear that US/Iran war will escalate
- Oil prices surge
- The US dollar rallies across the board accept against yen
USDCAD open: 1.3916, overnight range 1.3880-1.3919, close 1.3893, WTI 101.62, Gold 4533.17.
The Canadian dollar fell further overnight due to another wave of negative risk sentiment, which fuelled broad-based US dollar demand.
Traders are looking ahead to Fed Chair Jerome Powell’s comments today.
Global markets opened the week on the back foot as the US, Israel, and Iran all escalated tensions. Missile exchanges continued, with Yemeni Houthis adding to the conflict, leaving a heavy fog of war hanging over sentiment. Trump said Iran has agreed to most elements of a 15-point US peace proposal, a claim Tehran quickly rejected. He also floated the idea of seizing Iranian oil, raising the prospect of US boots on the ground and a longer conflict.
Oil traders were spooked, and WTI gapped higher at the Asia open, hit 103.37, then eased to 100.32 before climbing to 101.24 in NY.
Asian markets ended the session under pressure, with Japan’s Topix sliding 2.94%, Hong Kong’s Hang Seng down 0.81%, and Australia’s ASX off 0.65%.
By 7:35 am, European equities were edging higher as Treasury yields backed off. Germany’s DAX has gained 0.30%, France’s CAC is up 0.46%, and the UK’s FTSE 100 is ahead by 0.90%. S&P 500 futures have risen 0.60%, the 10-year Treasury yield is sitting at 4.373%, the DXY is at 100.26, and gold (XAUUSD) is trading at 2549.41.
EURUSD traded in a 1.1484-1.1521 range and is hovering near the lows. The euro remains on the defensive as higher crude prices and concerns about a drawn-out US-Iran conflict boost demand for the US dollar. Broad-based USD strength has overshadowed a mixed-to-soft batch of Eurozone data, including Business Climate, Consumer Confidence, Economic Sentiment, and Services Sentiment.
GBPUSD moved within a 1.3224-1.3283 band and struggled to gain traction. Sterling has been dragged lower by persistent US dollar demand, while Bank of England MPC member Alan Taylor pushed back on expectations for two rate hikes this year, citing easing wage pressures and a softer labour market as reasons inflation is unlikely to become unanchored.
USDJPY ranged between 159.49 and 160.46, with an early spike in Asia reversing in New York trading. The pullback followed hawkish Bank of Japan minutes from the March 19 meeting and renewed concerns about official intervention. Japan’s Vice Minister for International Affairs, Atsushi Mimura, warned that speculative activity is increasing in both currency and crude markets and signalled that decisive action could be taken if conditions persist.
AUDUSD traded in a 0.6843-0.6875 range, with gains capped by a broader risk-off tone tied to Middle East tensions and rising oil prices.
