The dollar has strengthened against all G10 currencies as well as the majority of emerging market currencies. June WTI, previously at $82.60 on April 17, is currently nearing the $100 mark. July Brent, previously at $86.50, is now nearing $105. Both have experienced an increase for the sixth session out of the last seven. Equities and bonds are predominantly down. Gold and silver are currently providing no safe haven, sitting at 2–3-week lows. This week’s series of central bank meetings commenced with the Bank of Japan. At first glance, the 6-3 decision to maintain rates appeared somewhat hawkish; however, Governor Ueda did not convey a clearly hawkish stance, leading to a decline in the yen. The market continues to hold its ground at the JPY160 level. Tomorrow, the Bank of Canada and the Federal Reserve will convene for their meeting. In a significant development, Kevin Warsh is poised for confirmation as the next Fed chair, marking the beginning of a new chapter following the continuity established by Bernanke, Yellen, and Powell.

The euro reached a slight new peak during early North American trading yesterday, approaching $1.1755. The 1.1760 area represents the midpoint of the decline from the April 17 high (approximately 1.1850) to last week’s low (around 1.1670). It established a support level in the latter part of trading yesterday, close to $1.1720. Follow-through selling led it to approach $1.1685 today. The 20-day moving average stands at approximately $1.1690, with the euro maintaining its position above this level since April 3. A rise above $1.1710-20 would be favorable, but there are approximately 2.9 billion euro options set at $1.1700 that are set to expire today. Yesterday, certain short yen positions were covered in anticipation of the results from today’s BOJ meeting. The dollar declined to a four-session low around JPY159.10. It fell beneath JPY159 following the 6-3 BOJ decision to maintain its current stance. The JPY158.70 level represents the (50%) retracement of the dollar’s rebound from the low on April 17 (~JPY157.60) to the high reached last week (~JPY159.85). However, Governor Ueda did not deliver a clear bearish signal, resulting in the greenback recovering to new session highs near JPY159.70. Our analysis of the momentum indicators indicates that the market remains optimistic about the JPY160 level.

Sterling achieved a six-session peak yesterday, approaching $1.3575. We observe significant resistance near $1.36, which limited sterling’s movement earlier this month. This also aligns with the (61.8%) retracement of sterling’s decline from the peak reached on January 27 (~$1.3870) to the low observed on March 31 (~$1.3160). The value settled at approximately $1.3530 during the North American afternoon session. It has been driven below $1.35, with options for GBP756 million expiring today. The 1.3510-20 area presents initial resistance. The Canadian dollar reached its highest point since March 12 during the early hours of the North American session yesterday. The US dollar experienced a brief trade just under CAD1.3600. A rebound to approximately CAD1.3625 encountered fresh selling pressure. The low in March was approximately CAD1.3525. The slight declines in US equities yesterday appeared to provide support for the dollar, which has rebounded to nearly CAD1.3660 today. A rise above CAD1.3670-90 enhances the outlook for the US dollar.

The Australian dollar achieved its highest closing value in almost four years yesterday, reaching approximately $0.7185. It achieved a new six-day peak close to $0.7200 during North American trading hours. Options valued at nearly A$1.4 billion are set to expire today. Approximately two weeks prior, during intraday trading, it briefly exceeded $0.7220. It has returned with improved offerings today. Initial support was identified around $0.7160. A breach of $0.7145 may lead to an examination of a more robust support level within the $0.7100-10 range.