The USD is steady, oil extends gains, equity markets are under pressure, and US yields are mixed ahead of today's Fed rate decision. The U.S. dollar is holding steady ahead of the Federal Reserve decision, with markets fully pricing in a pause and little policy change expected in the near term. Attention has shifted to leadership transition risks, as Jerome Powell’s tenure nears its end and Kevin Warsh’s potential confirmation adds uncertainty to the future policy path. While rates are expected to remain unchanged into 2027, a more divided FOMC and continued political pressure for cuts are keeping investors cautious on the dollar outlook. Global equity markets are mixed as investors position ahead of key megacap tech earnings, with U.S. futures stabilizing and Nasdaq-linked stocks rebounding on dip-buying. European equities are modestly lower amid mixed corporate results, while Asian markets show a more uneven performance. Overall sentiment remains cautious but supported by the AI-driven earnings narrative, even as rising geopolitical tensions and the Fed decision keep volatility elevated. Elsewhere, Brent crude is edging higher toward $115 per barrel, supported by ongoing geopolitical tensions and supply risks in the Middle East. Meanwhile, gold prices are extending losses as safe-haven demand eases, while bitcoin firms on improved risk appetite. Today sees a busy economic calendar with focus on the German CPI, US Durable Goods, and the key BoC & Fed interest rate decisions, which will help drive intraday currency market direction.
News Headlines. The US ambassador to Ukraine is to leave over differences with Trump. The UAE is set to leave OPEC in a blow to the oil cartel. Germany to accelerate defence spending well ahead of NATO deadline. UBS trading gains fuel 80% profit surge. Emerging-market stocks hit a record high as Asian chipmakers surge. Putin pares back Victory Day parade over fear of Ukrainian strikes. Iran's Guards seize wartime power, blunting Supreme Leader role. Trump, unhappy with the latest peace proposal, says Iran is figuring out its leadership. Liberals are promising an improved bottom line in today's spring economic update.
In currency markets. Currency markets are coming under pressure against the U.S. dollar as heightened geopolitical tensions and elevated energy prices drive demand toward safe-haven assets. The greenback is finding renewed support amid a broader risk-off tone, with major currencies weakening as investors reassess global growth and policy divergence. Focus now turns to a heavy central bank calendar, with upcoming interest rate decisions from the Fed, ECB, BoE, BoJ, and BoC expected to be key drivers of FX direction.
In commodity markets. Oil prices rally 3.85%. Natural Gas, Gold & Coffee prices retreated 0.75%. Silver prices weakened 1%. Copper prices up 0.2%. Soybean prices firmed 0.3%, and Wheat prices gained 0.7%.
CAD pulled back from a seven-week high, easing for a second day against the greenback as the boost from recent M&A activity in the energy sector faded. Despite stronger oil prices and rising bond yields, the loonie tracked broader G10 weakness ahead of key central bank decisions, with both the Fed and Bank of Canada expected to hold rates. Attention now shifts to Canada’s fiscal update, where improving revenues may be offset by softer consumer spending and increased government outlays.
EURCAD is edging lower in early trading as the euro struggles to gain traction ahead of German inflation data and key central bank decisions, while the Canadian dollar finds relative support from higher oil prices and firmer yields. With both the ECB and the Bank of Canada expected to hold rates, the near-term direction is driven more by USD dynamics and commodity flows than by domestic fundamentals. Overall, the cross remains vulnerable to further downside in the short term, particularly if energy prices stay elevated and support the loonie.
EUR remains subdued around the 1.1700 level as markets await key catalysts from German inflation data and the Federal Reserve’s policy decision. With both the Fed and ECB expected to hold rates, attention is firmly on forward guidance from Powell and Lagarde, particularly around inflation risks linked to elevated energy prices. In the near term, the pair is likely to remain range-bound, with direction hinging on incoming inflation data and any shift in central bank tone.
GBPEUR is holding steady around mid-1.15, reflecting a broadly neutral tone as markets await rate decisions from both the ECB and the Bank of England. Both central banks are expected to keep policy unchanged, with the ECB facing rising inflation risks from energy prices and the BoE balancing weak labour conditions against resilient growth. Near-term direction for the pair will hinge on forward guidance, particularly whether either central bank signals a shift toward tightening in the coming months.
GBP is holding below 1.3500 as the U.S. dollar finds support amid a cautious risk backdrop, with geopolitical tensions around the Strait of Hormuz and pre-Fed positioning weighing on sentiment. At the same time, Bank of England expectations are providing a partial offset for sterling, with Governor Andrew Bailey signalling a cautious approach while acknowledging persistent inflation risks, leaving the door open for potential tightening if data remains firm. Near-term direction will depend on both the Fed outcome and BoE guidance, though ongoing geopolitical uncertainty is likely to keep the dollar supported and cap upside in the pair.
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