The markets have placed significant emphasis on President Trump’s indication that the conflict with Iran could be approaching its conclusion. Recent reports indicate that the Strait of Hormuz continues to be largely obstructed, with multiple European nations pledging additional military resources to safeguard the UAE. In the complexities of conflict, public statements serve as a crucial element of the overall strategy. Nonetheless, there appears to be a sense of optimism in the markets. However, the momentum from yesterday seems to have dissipated, suggesting a pause as participants await new information or further insights. The dollar is predominantly exhibiting a narrow mix against the G10 currencies. April WTI continued its decline from yesterday, yet remains several dollars a barrel above the earlier low of approximately $84.45. Equities are on the rise. China has announced a significant trade surplus, while the PBOC has adjusted the dollar’s fix downwards by 0.25%, reaching a new multi-year low.
The euro rebounded from a four-day low on Monday during the Asia Pacific session, hovering just below $1.1510. It achieved session highs nearing $1.1640 following remarks from Prent Trump indicating that the war might be concluding shortly. The euro surpassed the high of the previous session for the first time this month. It exhibited an outside up day, trading on both sides of last Friday’s range and closing above its high. Today’s follow-through buying has propelled the euro to nearly $1.1665, yet it remains lower for the day. Options for nearly a billion euros at $1.1650 are set to expire today, alongside another set for 875 million euros at $1.1600 that will also reach expiration. After reaching JPY159 as oil surged during the Asia Pacific session yesterday, the dollar reversed course following President Trump’s remarks and declined to approximately JPY157.65. A bearish shooting star candlestick has formed. Despite the significant upward revision of Q4 25 GDP and the continued pullback in oil prices, the subsequent selling of the dollar was constrained, reaching just above JPY157.30. Initial support is observed near JPY156.50
Sterling demonstrated a robust recovery from a four-day low just under $1.3285, advancing to nearly $1.3450 following remarks from President Trump. The asset has seen its gains extend to nearly $1.3485 today, nearing a resistance zone within the $1.3490-$1.3510 range. The greenback experienced a decline, reaching approximately CAD1.3525, marking nearly a four-week low yesterday. The recovery in North America reached approximately CAD1.3610. It is experiencing subdued trading activity today, remaining within the range established yesterday. Initial resistance is positioned at approximately CAD1.3615, followed by a range of CAD1.3630-40. In the interim, Prime Minister Carney has announced special elections to address the three vacant positions in the House of Commons, scheduled for April 13. Should his Liberal Party secure victories in all three contests, he will achieve a one-seat majority.
The Australian and New Zealand dollars exhibited bullish outside up days, trading on both sides of the previous session’s range and closing above the prior day’s highs. Follow-through buying has been constrained, with both currencies staying within the range established last Tuesday (Aussie ~ $0.6945 – $0.7125 and Kiwi ~ $0.5835 – $0.5955). The Australian dollar has appreciated to approximately $0.7100, coinciding with the expiration of options valued at nearly A$350 million today.