- US offers 15-point plan to end Iran war-Iran denies talking to US
- No top tier US or Canada economic data today.
- The US dollar opened higher despite improved risk sentiment
USDCAD open: 1.3793, overnight range 1.3750-1.3798, close 1.3763, WTI 87.63, Gold 4552.27
The Canadian dollar is under pressure along with the other G-10 major currencies, even though global risk sentiment has improved slightly. The losses are entirely driven by US dollar sentiment and domestic issues are not a factor.
The US said it has offered a 15-point plan to end the war in Iran. Iran must agree to which included dismantling its nuclear program, halt uranium enrichment, accept limits on ballistic missile activity, cease backing proxy groups, and allow the reopening of the Strait of Hormuz.
The issue is that a spokesperson for the Iranian Revolutionary Guard denied that they were negotiating with the Americans.
Nevertheless, global equity indices and gold prices are higher. WTI crude has dropped 5.36% and is trading in a 86.60-89.57 range.
Asian equities closed with gains. Japan’s Topix rose 2.57%, Hong Kong’s Hang Seng gained 1.09%, and Australia’s ASX climbed1.85%.
By 7:30 am, the France’s CAC 40 is up 1.61%, Germany’s DAX up 1.66%, and the UK’s FTSE 100 higher by 1.21%. S&P 500 futures have gained 0.96%, the US 10-year yield is 4.319%,and the DXY index was at 99.24.
EURUSD drifted in a 1.1587-1.1631 band, supported by a modest improvement in risk appetite linked to softer oil prices. Germany’s Ifo Business Climate index dropped to 86.4 from 88.4 in February, while the Current Assessment held at 86.7 and Expectations fell to 86 from 90. Ongoing geopolitical tensions from Iran are limiting gains.
GBPUSD traded in a 1.3353-1.3446 range. The move was supported by rising 10-year Gilt yields, which have returned to levels not seen since 2008 and leading to forecast for two BoE rate hikes this year. UK inflation data showed little change in February.
USDJPY traded choppily in a158.58-159.20 band. Lower oil prices fueled downside pressure while Iran’s rejection of negotiations helped limit losses. Minutes from the Bank of Japan January 23 meeting were released but had little impact due to their dated nature.
AUDUSD bounced in a 0.6939-0.7025 range. The gains were on the back of improved global risk sentiment driven by falling oil prices and the losses due to uncertainty surrounding the Iran situation.
