The USD edges higher, oil prices rebound, equity markets are up, while US yields are mixed amid ongoing uncertainty over Iran talks. The USD remains supported near a six-week high as strong U.S. economic data and ongoing geopolitical uncertainty around the U.S.-Iran negotiations reinforce demand for safe-haven assets. Mixed signals from Washington and Tehran have kept markets cautious, with traders expecting further dollar strength if tensions in the Middle East persist or escalate. Overall, resilient U.S. fundamentals combined with global risk aversion continue to favour the dollar against major and emerging-market currencies. Global equities rose as investors cautiously welcomed signs of progress in U.S.-Iran peace talks, despite ongoing uncertainty over Tehran’s uranium program and the Strait of Hormuz. Gains across European, U.S., and Asian markets reflected hopes that geopolitical tensions could eventually ease, with Japan’s Nikkei leading advances on strong AI-related shares. However, higher oil prices and inflation concerns continue to keep investors alert to the risk of further disruption in global energy supplies. Elsewhere, oil prices rebounded as persistent uncertainty around U.S.-Iran negotiations and fears over disruptions in the Strait of Hormuz continued to support energy markets. Meanwhile, gold and bitcoin prices slipped as easing safe-haven demand weighed on alternative assets. In focus today, CAD Retail Sales, Michigan Consumer Sentiment and Fed Chair Warsh swearing-in ceremony.
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In currency markets. Against the USD, Asian currencies stayed under pressure as elevated oil prices and geopolitical uncertainty weighed on regional markets. The yen remained near 159 per dollar despite suspected intervention by Tokyo, while the Bank of Japan's gradual policy tightening continued to leave the currency at a disadvantage. Emerging Asian currencies also weakened, with Indonesia’s rupiah hovering near record lows despite government measures to support the currency.
In commodity markets. Oil prices rally 2.1%. Natural Gas & Silver prices retreat 0.5%. Gold prices ease 0.25%. Copper prices strengthened 1.1%. Coffee prices retreated 0.4%. Soybean prices firmed 0.45%, and Wheat prices up 0.3%.
CAD continues to stall near six-week lows against the U.S. dollar as fading optimism over Middle East peace talks, rising oil prices, and weak domestic sentiment weigh on the loonie. Additional pressure is mounting amid growing political uncertainty surrounding Alberta’s proposed separation referendum, raising concerns about Canada’s long-term economic and fiscal stability. Meanwhile, focus will be on today’s Canadian retail sales report for further guidance on the strength of the domestic economy and the Bank of Canada policy outlook.
EURCAD stalled near the 1.6000 level as broader U.S. dollar strength and geopolitical uncertainty continued to pressure risk-sensitive currencies. The cross retains upside potential as softer oil prices, diverging central bank policy expectations between the ECB and Bank of Canada, and growing political uncertainty surrounding Alberta’s proposed separation vote are expected to keep the Canadian dollar under pressure. Investors will also monitor upcoming Canadian economic data and ECB commentary for further direction on the pair.
EUR remained subdued near 1.1600 despite slightly improved German business sentiment data, as broader support for the U.S. dollar continued to cap upside momentum. The pair remains under pressure from rising expectations of a more hawkish Federal Reserve stance, supported by resilient U.S. economic data and ongoing geopolitical uncertainty surrounding U.S.-Iran negotiations
GBPEUR remained supported as resilient UK business activity and easing concerns over Britain’s political stability helped Sterling outperform the Euro. Positive German GDP and consumer sentiment data provided only limited support for the common currency amid broader concerns over weak Eurozone growth and geopolitical uncertainty. The pair maintains a constructive bias for Sterling as relative economic momentum continues to favour the UK over the Eurozone.
GBP stabilized above the 1.3400 level despite weaker-than-expected UK retail sales data, as investors largely looked through the disappointing consumer figures. Sterling found support from resilient UK business activity and easing domestic political concerns, while markets remained focused on geopolitical developments surrounding the U.S.-Iran conflict.
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