The primary catalyst influencing the market at this moment is the conflict in the Middle East. Following a subdued conclusion last week, the dollar has experienced a rebound. The increase stands at 0.5% or more relative to the majority of G10 currencies. The Canadian dollar, typically exhibiting stronger performance in a robust US dollar context, has declined by approximately 0.1% during late European morning trading. The Swiss franc, a traditional safe haven, is off around 0.65%. April WTI, which settled near $67, initially surged to almost $75.35 and is now around $72. Equities are predominantly down. The complexities of the current situation, along with the significant impact on Iran, render the final outcome challenging to foresee at this moment. The situation extends far beyond the strike that occurred last June, which the United States asserted had incapacitated Iran’s nuclear capabilities. Reports indicate that the White House is signaling the conflict may persist for several weeks.

The euro traded just under $1.1700 at the conclusion of the Asia Pacific session, following a close near $1.1810 prior to the weekend. It experienced a rebound during early European trading, reaching nearly $1.1750 before encountering resistance. There is a necessity for leadership in North America. A rise above $1.1760-80 would contribute to a more stable outlook, whereas a decline below the $1.1670 level might indicate a potential test of $1.1600. The dollar appeared to be in a favorable position against the Japanese yen at the conclusion of last week. It briefly traded under JPY156.00 today before climbing to JPY157.25 during the local session. The minimum observed during the European morning was approximately JPY156.80. Options valued at nearly $600 million at JPY157 are set to expire today.

Sterling established a range around $1.3435-40 in recent trading before declining to approximately $1.3315 today, marking its lowest point since mid-December. This slightly exceeded the (61.8%) retracement of sterling’s rally since last November. It rebounded to approximately $1.3410 during European trading hours. To reinforce the recovery, it needs to surpass the $1.3450 level. Following multiple attempts to test the CAD1.37 level in recent days, with minimal results, the market seems to have lost momentum as the weekend approaches. Late greenback longs were reduced, resulting in a decline to CAD1.3625, marking a two-week low, which remained stable today. The US dollar has been confined to mostly the pre-weekend range so far today, trading between about CAD1.3635 and CAD1.3685.

The Australian dollar concluded the trading session ahead of the weekend, settling just under $0.7120. Last month’s peak was noted around $0.7150. Today, it experienced a slight decline, falling just below $0.7035. Last week’s low was approximately 0.7025. The Australian dollar rebounded to nearly $0.7100 in Europe, where it encountered resistance.