The USD eases, oil prices slip, equity markets are up, and US yields rise ahead of Trump's Iran deadline. The U.S. dollar remains elevated near recent highs as markets brace for a key deadline on Iran and the reopening of the Strait of Hormuz. Safe-haven demand continues to underpin the greenback, supported by surging energy prices and persistent geopolitical uncertainty. While some optimism around a potential resolution has capped further gains, the dollar remains biased higher, with direction hinging on developments around Gulf shipping and escalation risks. Global equities cautiously advance as investors await clarity ahead of a key Iran deadline, balancing escalation risks with hopes for a last-minute deal. Gains remain modest, with markets lacking strong conviction amid ongoing uncertainty around energy flows and geopolitical outcomes. Volatility is expected to persist as traders remain highly sensitive to incoming headlines. Elsewhere, oil prices and bitcoin are easing as markets reassess risk and supply dynamics amid ongoing geopolitical uncertainty. Meanwhile, gold prices are firming, supported by renewed safe-haven demand. In focus today are the USD ADP Employment Change 4-week avg, Durable Goods, Nondefense Capital Goods Orders ex Aircraft, and CAD Ivey PMI, alongside several Fed speakers, to help provide direction to currency markets.
News Headlines. Markets on edge as Trump's deadline for Iran deal looms. JPMorgan to build Canary Wharf's tallest tower after City Airport approval. Trump says US could destroy Iran 'in one night' as he demands opening of Hormuz. Under airstrikes, Iran defiant on eve of Trump's ceasefire deadline. Vietnam parliament elects ex-Central Bank governor Hung as PM. VP Vance visits Hungary to boost Orban ahead of pivotal election. Chinese pigs fed new menu as Beijing weans farmers off US soy. Canada's services economy shrinks as war delays client decision-making. The TSX hit a four-week high as energy and financials posted gains.
In currency markets. Against the U.S. dollar, both the Australian dollar and South Korean won are firming as the greenback softens and risk sentiment improves. The Korean won is benefiting from a rebound in regional risk appetite and stabilization in Asian equity markets, though it remains vulnerable given its sensitivity to global trade and capital flows. CNY firms by 0.35%, KRW strengthens 0.7%, while Asian currencies on average were up just 0.1% against the USD. Trading currencies rebound, with CHF, NZD, JPY, NOK & PLN flat, DKK, MXN, ZAR & CZK gained 0.2%, AUD & SEK firmed 0.35%, and KWD advanced 0.6% against the USD.
In commodity markets. Oil & Soybean prices slip 0.1%. Natural Gas & Coffee prices tumble 1.5%. Gold & Copper prices firmed 0.3%. Silver prices are flat, and Wheat prices weaken 0.9%.
CAD eases in early trading, underperforming its G10 peers while holding above the 1.3900 level, as softer oil prices and a widening trade deficit weigh on the currency. Canada’s external balance has deteriorated, adding to concerns around near-term growth momentum and external demand. “Net trade will likely be a negative for Q1 GDP due to the surge in imports,” Andrew Grantham, a senior economist at CIBC Capital Markets, said in a note. “However, that's also likely a sign of restocking following the inventory drawdown that was a large drag on GDP in the previous quarter.” Focus now turns to today’s Ivey PMI for further direction on the domestic outlook.
EURCAD is gaining toward 1.6100, supported by the euro's resilience and ongoing policy divergence between a relatively hawkish ECB and a more cautious Bank of Canada. The move is further underpinned by softer oil prices, which are weighing on the commodity-linked Canadian dollar. With CAD facing both external and domestic headwinds, the cross remains biased higher, although direction will remain sensitive to energy markets and broader risk sentiment.
EUR edges higher, trading above 1.1550 as the euro holds firm ahead of Trump’s Iran deadline, supported by a softer U.S. dollar and hawkish ECB commentary. The pair is benefiting from cautious positioning as markets await clarity on geopolitical developments and potential impacts on energy flows. However, gains remain tentative, with upcoming U.S. jobs data and durable goods orders likely to provide key direction for the next move.
GBPEUR holds steady below the 1.1500 level, as mixed Eurozone and UK services data keep the cross range-bound. The euro remains under mild pressure despite a slight upward revision in services activity, while UK growth slows to its weakest pace in nearly a year. With both economies showing signs of softening amid ongoing geopolitical uncertainty, directional conviction remains limited.
GBP firms, straddling the 1.3250 level, finding support from a softer U.S. dollar as risk sentiment stabilizes ahead of key geopolitical and economic catalysts. The pair is supported by easing safe-haven demand, though caution prevails with Trump’s looming Iran deadline keeping markets on edge. Focus now turns to upcoming U.S. jobs data and durable goods orders, which will provide key insight into the growth and inflation outlook. These releases will be critical in shaping Fed expectations and determining the next directional move for the pound.
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