- Counting down to Trump’s 8:00 PM deadline for Iran
- WTI oil prices inch higher
- The US dollar is mixed in quiet trading.
USDCAD open: 1.3920, overnight range 1.3906-1.3930, close 1.3912, WTI 112.50, Gold 4672.25.
The Canadian dollar is directionless range and is trading where it was a week ago. FX price action is dictated by US and Iran developments and not economic fundamentals. Elevated oil prices continue to provide support for the Canadian dollar and helping to offset broad-based US dollar demand because of geopolitical risk. The result is a market going nowhere in a hurry, tracking swings in risk sentiment rather than domestic fundamentals.
WTI traded in a 111.31–116.55 range and is sitting mid-band, reflecting the same indecision. The near-term outlook hinges entirely on the political outcome. A delayed deadline and any move toward reopening the Strait of Hormuz would likely trigger a sharp retracement toward the 90.00/b area, while escalation and disrupted shipments could send prices toward 150.00. At this point, direction is binary and conviction is low.
Trump gave Iran until 8:00 pm ET tonight to accept his “deal” or face obliteration, and Tehran has already rejected it.
Asian equities closed mixed. Japan’s Topix rose 0.25% and Australia’s ASX 200 gained 1.74%. The Hong Kong Hang Seng dropped 0.70%.
As of 7:10 am, the German Dax has risen 0.45%, the French CAC 40 is up 0.98% and the UK FTSE 100 has gained 0.20%. S&P 500 futures have fallen by 0.43% . The 10 year yield is 4.34% and the DXY is 100.01.
EURUSD traded in a 1.1524–1.1576 range, pushing toward the top end as improved risk sentiment offsets weak Eurozone data. Despite softer Sentix confidence and PMI readings, the pair remains bid while holding above 1.1510, with a break of 1.1580 needed to extend toward 1.1630.
GBPUSD moved in a 1.3211–1.3285 range, tracking the broader euro-driven tone. Weak UK Services PMI data highlights the drag from global uncertainty, but price action remains supported by the shift in sentiment rather than domestic fundamentals.
USDJPY traded in a 159.47–159.93 range, with gains capped by intervention risk and softer US yields, while firm oil prices continue to limit downside.
AUDUSD traded in a 0.6898–0.6949 range, caught between improving risk appetite and deteriorating domestic data. Weak PMI readings and rising inflation expectations reinforce a stagflation backdrop, keeping rallies contained.
US Durable Goods Orders are due, but the release is largely irrelevant in the current environment, with markets focused squarely on geopolitical developments. Canada offers no data to shift the narrative, leaving USDCAD at the mercy of headlines and oil.
