The USD holds steady, oil prices tumble, while equity markets and US yields are mixed amid Trump's comments on hopes for peace. The U.S. dollar steadies at weekly lows, and is on track for a second consecutive weekly loss as improving ceasefire prospects and renewed US-Iran talks continue to unwind safe-haven demand. Despite holding near recent lows, the greenback is finding some near-term support as markets adopt a more cautious stance amid lingering geopolitical and inflation risks. Global equity markets are mixed, with Asian equities lower while European markets and U.S. futures edge higher on optimism around a potential US-Iran deal. U.S. stocks remain near record highs, supported by strong earnings and AI-driven momentum. Despite the positive tone, uncertainty around energy markets and deal timing continues to cap conviction. Elsewhere, oil prices tumble as easing geopolitical tensions and renewed hopes for diplomacy reduce fears of supply disruption in the Middle East. Meanwhile, gold and Bitcoin tick higher, supported by shifting investor positioning as the war risk premium fades. Another light economic calendar, so the focus will be on Iran/US peace talks and IMF Meeting updates, alongside Fed speakers to provide direction for currency markets.
News Headlines. Trump says Iran war 'should be ending pretty soon' as Lebanon ceasefire begins. US's status as lowest-cost dollar borrower challenged as investors shun Trump risk. UK Starmer battles calls to resign over Mandelson vetting. Shares at the world's biggest chocolate maker plunge as cocoa prices collapse. Merger rules to favour scale and innovation, says EU competition chief. Iran's war drives Germany towards its fourth year of stagnation. Canada presses for wider trader agreement in talks with us. China steps up its diplomacy with Iran as it seeks a smooth summit with Trump. Canada Post lays out 5-year plan to convert to community mailbox delivery.
In currency markets. Against the U.S. dollar, G10 currencies edge higher in cautious trading as improving sentiment around potential US-Iran peace talks reduces safe-haven demand for the greenback. However, gains remain measured as uncertainty around the timing and outcome of negotiations persists, keeping markets in a tentative risk-on stance. Overall, FX moves are subdued, with investors balancing fading war premium against ongoing geopolitical risks.
In commodity markets. Oil prices tumble 4%. Natural Gas advance 0.8%. Gold prices are flat. Silver prices strengthened 1.2%. Copper & Coffee prices eased 0.45%. Soybean & Wheat prices slipped 0.25%.
CAD firms in early trading, with USD/CAD extending through 1.3700 ahead of the upcoming CPI release. Strength in the loonie is supported by improved risk sentiment, recent G10 outperformance, and focus on upcoming data, including housing starts (seen at 258K vs. 250.9K prior) and international securities transactions. However, with oil prices softening, gains may be capped, with resistance expected around 1.3650.
EURCAD slips in early trading as the Canadian dollar remains supported by broader risk sentiment, despite weakening oil prices. The euro, meanwhile, consolidates below recent highs, leaving the cross under mild downside pressure. Near-term direction remains balanced, with markets watching geopolitical developments and incoming data for further cues.
EUR trades steady in early sessions, with the single currency consolidating just below the 1.1800 level following its recent rally. The pair is entering a period of consolidation as markets adopt a cautious stance ahead of further developments between the US and Iran. Near-term direction remains headline-driven, with investors awaiting confirmation of renewed talks for the next move.
GBPEUR holds steady in early trading, with the pound struggling to build on recent gains despite stronger UK data as cautious BoE messaging and rising political uncertainty weigh on sentiment. The euro remains supported by firmer Eurozone inflation, reinforcing expectations of gradual ECB tightening. Overall, the cross remains range-bound, with underlying bias still favouring the euro on rate differentials.
GBP holds steady in early trading, with the pound remaining capped at 1.3550 as easing expectations for further BoE rate hikes weigh on the pound. Softer inflation concerns linked to lower energy prices and a more cautious policy outlook are limiting upside momentum. Near-term direction remains sensitive to shifts in rate expectations and broader market sentiment.
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