EUR/USD
Commerzbank’s Thu Lan Nguyen argues that in the short term EUR/USD gains are capped as markets may be overestimating the European Central Bank’s (ECB) reaction to the latest inflation shock. She notes the Euro (EUR) and Pound (GBP) have held up better than in 2022 thanks to expectations of quicker tightening. Over the longer term, she highlights greater inflation and policy risks for the US Dollar (USD) versus the Euro.
GBP/USD
GBP/USD advances during the North American session on Friday as breaking news revealed Iran’s reopening of the Strait of Hormuz following the agreement of a ceasefire in Lebanon, which pushed the British Pound (GBP) to a daily high near 1.3600. At the time of writing, the pair trades at 1.3567, up 0.36%.
USD/JPY
USD/JPY edges lower on Friday as the Japanese Yen (JPY) strengthens against a softer US Dollar (USD), with easing Oil prices providing additional support, given Japan’s heavy reliance on imported energy. At the time of writing, the pair is trading around 158.18, down 0.61% on the day.
AUD/USD
The AUD/USD surged toward the 0.7200 price region on Friday, as improving headlines out of the Middle East weigh on the US Dollar (USD) and support risk-sensitive currencies like the Australian Dollar (AUD).
NZD/USD
NZD/USD pares its daily losses, trading around 0.5880 during the Asian hours on Monday. The pair pares its daily losses following the release of New Zealand’s trade balance data, which showed a surplus of NZD 698 million month-over-month (MoM) in March, swinging from a deficit of NZD 365 million in February.
USD/CAD
The USD/CAD pair holds its Friday’s recovery move around 1.3700 during the late Asian trading session on Monday. The Loonie pair ticks up as renewed concerns over the longevity of the temporary ceasefire between the United States (US) and Iran has improved the safe-haven demand of the US Dollar (USD).
USD/CHF
The USD/CHF pair trades 0.13% higher to near 0.7830 during the Asian trading session on Monday. The Swiss Franc pair rises as the US Dollar (USD) trades higher, following Iran’s denial to attend the second round of talks with the United States (US).
CRUDE OIL
Oil prices jumped more than 5% on Monday, on fears that the ceasefire between the United States and Iran could collapse after the U.S. seized an Iranian cargo ship, while traffic through the Strait of Hormuz stayed largely halted.
Gold (XAU/USD) struggles to capitalize on its modest intraday recovery from the $4,737-$4,738 region – a one-week trough touched during the Asian session on Monday. The US Dollar (USD) retreats from a one-week high and, for now, seems to have stalled its recovery move from a nearly two-month low set on Friday. This turns out to be a key factor lending some support to the commodity. However, a sharp intraday rally in Crude Oil prices revived inflationary concerns and pushed US Treasury bond yields higher, capping the non-yielding yellow metal’s intraday move up to the $4,815 region.
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