- WSJ claims Trump pondering ending Iran war
- FX traders are sceptical as US dollar index remains bid.
- The US dollar trading with a mixed note in early NY.
USDCAD open: 1.3937, overnight range 1.3917-1.3942, close 1.3925, WTI 100.47, Gold 4555.64.
The Canadian dollar is trading sideways in a lack-luster session, dominated by Iran war news.
The Globe and Mail reported that Prime Minister Mark Carney may move to prorogue parliament if his party secures all three by-elections on April 13, which would result in a slim one-seat majority. Such a move would allow the government to reorganize committees and push legislation through more efficiently.
WTI oil traded in a 100.88–106.82 range, with the low set during the Asian session before rebounding to 104.53. Prices continue to whip around on a steady flow of contradictory headlines surrounding the US-Iran situation.
Canada GDP is expected to be flat in January
The Wall Street Journal suggested the US may be looking to wrap up the Iran conflict without disrupting the Strait of Hormuz. That headline nudged European equities higher, pressured Treasury yields, and boosted gold. The US dollar, however, held firm, trading in a narrow 100.39–100.52 band, while WTI crude slid from 106.82 to 100.88 before stabilizing.
If the objective is a quick exit, the simultaneous military build-up in the region tells a different story. FX markets appear unconvinced, and that scepticism is keeping the dollar supported.
Fed Chair Jerome Powell struck a steady tone in remarks at Harvard, signalling that holding rates unchanged remains appropriate despite the energy shock. While he acknowledged rising price pressures, he emphasized that such shocks also dampen growth and employment.
Attention now turns to the JOLTS report, with job openings expected to edge down to 6.87m from 6.946m. Fed funds pricing continues to point to no change at the April 29 meeting, with odds near 97%.
Asian markets ended the session weaker across the board. Japan’s Topix fell 1.26%, capping a sharp monthly decline of 10.35%. Hong Kong’s Hang Seng managed a 0.15% gain on the day but still dropped 6.7% in March, while Australia’s ASX added 0.25% but finished the month down 6.93%.
As of 7:35 am, the UK FTSE 100 has risen 0.92%, the German DAX is up 0.82%, and the French CAC 40 has gained 0.68%. S&P 500 futures are higher by 0.92%. The US 10-year yield is at 4.301%, and the DXY sits at 100.41.
EURUSD traded in a 1.1448–1.1491 range. Support came from easing geopolitical concerns, although the broader technical backdrop remains negative. Eurozone inflation data came in softer than expected, with headline and core HICP both at 2.5% versus forecasts of 2.7%.
GBPUSD climbed to 1.3224 from 1.3159 due to increased risk appetite and firmer UK data. UK GDP growth was modest at 0.1% q/q and 1.4% y/y while house prices rose 0.9% m/m, beating expectations.
USDJPY churned in a 159.49–159.97 range, lacking clear direction as domestic data failed to generate interest. Softer yields and lower oil prices kept the pair on the defensive.
AUDUSD was steady in a 0.6834-0.6875 band helped by hawkish minutes from the March 17, RBA meeting. The minutes revealed that policymakers were concerned about the inflationary impact from the oil spike and hinted at the need for another rate increase.
In the US, attention will be on Chicago PMI, JOLTS job openings, and Consumer Confidence data.
