- Trump extends Iran ceasefire “indefinitely”
- Strait of Hormuz still closed.
- The US trading sideways but opens with small gains.
USDCAD open: 1.3655 overnight range 1.3644-1.3668, close 1.3668, WTI 90.78, Gold 4755.49
The Canadian dollar traded in a subdued and uneventful overnight. Prices were underpinned because global risk sentiment improved modestly. Trump stepped back from his threat of a large-scale bombing campaign against Iran and extended the ceasefire “indefinitely.”
Canada’s Chief Trade Negotiator, Janice Charette, warned that talks with the United States could face turbulence and urged Canadian businesses to engage directly with their US counterparts to reinforce the importance of the bilateral economic relationship.
WTI oil climbed from 87.67 to 91.41 before easing back to 90.11 in New York. The extension of the ceasefire weighed on prices, pushing them toward session lows, while reports of Iranian attacks on ships in the Strait of Hormuz provided upward pressure.
The Warsh confirmation hearing failed to generate much reaction. Kevin Warsh faced questioning from Senators and appeared to hold his ground. He backed Fed independence and avoided giving clear signals on monetary policy. Senator Thom Tillis said he intends to block Warsh’s confirmation until the Department of Justice completes its investigation into Jerome Powell and the Federal Reserve, which may take time. Trump added that he wants the investigation to run its full course.
Asian equity markets finished lower, with Japan’s Topix down 0.67%, Hong Kong’s Hang Seng falling 1.22%, and Australia’s ASX 200 declining 1.18%.
As of 7:30 a.m. ET, European markets are mixed to flat. France’s CAC 40 is down 0.31%, while the UK FTSE 100 and Germany’s DAX are flat. S&P 500 futures are up 0.51%, the 10-year Treasury yield is 4.275%, and the DXY is 98.35.
EURUSD traded in a 1.1734–1.1763 range and held a modest bid after ignoring Tuesday’s weak German and Eurozone ZEW data. Slightly improved sentiment following the extension of the Iran ceasefire offered some support. Short-term technicals remain bullish above 1.1710.
GBPUSD traded choppily in a 1.3498–1.3535 range but has a mild bid. UK inflation rose, largely due to higher fuel prices, but the move was expected. ING analysts noted it is too early to determine the scale or duration of the increase, suggesting the Bank of England is unlikely to respond. The short-term trend remains bullish above 1.3490.
USDJPY drifted in a 158.11–159.46 band. Prices edged higher on the back of firmer U.S. Treasury yields and elevated oil prices, although improved risk sentiment limited gains. The pair is approaching levels where the risk of Bank of Japan intervention increases. The BoJ meets next week and is not expected to change rates.
AUDUSD traded in a 0.7147–0.7177 range and moved sideways with a slight upward bias. Support is coming from improved risk sentiment, stronger commodity prices, and positive technical signals. The uptrend remains intact above 0.7050, with a break above 0.7210 needed to target 0.7280.
The data calendar is light today, with no top-tier releases from either Canada or the United States.
