By Justin McQueen

Apr 2 (Reuters) - Risk assets are following the wartime playbook, heading into the weekend offered as markets trim exposure and layer on geopolitical risk hedges. In FX, that has led to a firmer USD, briefly dragging cable through 1.32. Still a headline-driven tape though, so conditions remain skittish and conviction light.

Oil remains the real-time geo barometer, which is not far from the $120 swing high. This level is significant and a clean topside break would signal a regime where market psychology flips from supply shock to demand shock narrative.

It's worth noting that in 2022, the $139 swing high in Brent was never taken out. A break of $120 would be key difference from 2022 and likely the catalyst for the next leg lower in risk. For GBP, weakness would likely show up against both USD and JPY.

One thing to keep an eye on is that GBP is rolling into its seasonally strongest window, with April historically the best month for the currency. The usual caveats apply, seasonals should not be used in isolation, especially in this environment. But if and when the geo noise fades and the dust settles, it is an informative tailwind for any short-term mean-reversion.
Avg GBP perf


Average SPX day


(stin McQueen is a Reuters market analyst. (The views expressed are his own) ((Email: ))

Credit Agricole CIB Research discusses its NZD/USD outlook and targets.

"We are maintaining our upward path for NZD/USD during 2026 seeing that the RBNZ will be forced to raise rates as the second-round inflationary effects from the Middle East crisis emerge in H226. The net share of NZ businesses looking to pass on their higher costs to consumers is growing. The RBNZ is staying dovish longer than we expected, however, and growth is rebounding a little less strongly than we anticipated," CACIB notes.

"So, we are revising down our NZD/USD forecast profile with the rally starting from a lower base. We now forecast NZD/USD to reach 0.60 in Q2 (previously 0.62) and 0.63 by end-2026 (previously 0.65). We leave our NZD/USD outlook for 2027 unchanged," CACIB adds.

• Ether fell sharply due to risk-off driven by Pres. Trump's threat to Iran

• Investors scramble to look for safe-assets, the US$ was the beneficiary

• USD/CNH rallied above 6.9035 while stocks, gold, silver traded lower

• Big rallies in oil helped to underpin the risk-off trading sentiment

• Ether fell below the 10- & 50-DMAs, daily & monthly RSIs turned downward

• Ether trades within February's range, suggests consolidation phase persists

• Bear flag continuation pattern on daily chart reinforces bearish signals

• If geopolitical tensions increase risk could sour more & Ether may fall further
eth


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

MUFG Research discusses the worst case scenarios for the Iran conflict and its implications for the USD.

"In a severe scenario, the conflict drags on and attacks on energy production infrastructure increase in scale which extends the timeline of supply disruption. Brent crude oil could then trade in a higher range of USD 120-160p/bl that results in increased risks of global recession," MUFG notes.

Equity markets fall more sharply and the ToT and yield dynamic impacting FX fades and there is a stronger initial flight to the US dollar. The DXY in this scenario could extend higher up to the 105-level,"MUFG adds.

ANZ Research discusses the scope for Japan's MoF intervention or coordinated intervention in USD/JPY.

"We view the threshold for intervention as likely to be somewhat above 160, potentially around 164, which USD/JPY could approach if oil prices exceed USD120/bbl. Intervention also becomes more probable if the currency pair moves rapidly in a disorderly fashion.

With the USD currently displaying greater strength, there may be an increased likelihood of coordinated intervention should the upward movement in USD/JPY persist. BoJ’s March meeting minutes were hawkish," ANZ notes.

"Overall, we see USD/JPY remain within a 156-164 range in the coming weeks depending on how the conflict evolves from here," ANZ adds.

(corrects day on 4th bullet)

• Cable falls to 1.3183 as safe-haven dollar strengthens on Trump's Iran threats

• 1.3183 is the lowest level since Tuesday (1.3345 was Wednesday's high)

• U.S. stock futures tumble as Trump signals more Iran strikes

• 1.3172 and 1.3160 (Tuesday's four-month low) are GBP/USD support points

• UK firms report biggest jump in price expectations since April 2024, BoE survey shows

• BofA expects BoE rate hikes in June and July, then three rate cuts in 2027

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

• Pres. Trump threat to continue bombing Iran droves risk-off sentiment

• Oil rallied significantly which drove yields

higher

• Gold , silver , copper & stocks all traded lower

• The US$ went bid on its safe-haven status which drove AUD/USD downward

• The pair traded back belwo the 10- DMA & daily cloud base, traded 0.6941-0.6863

• NY opened with the pair trading just off that overnight low, pair was down -0.96%

• Techs lean bearish; RSIs are falling & a monmthly inverted hammer candle is in place
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• U.S.-listed shares of copper miners fall premarket, tracking lower prices of the red metal [MET/L]

• Benchmark three-month copper on London Metal Exchange down 1.06% at $12,305 a metric ton

• Copper prices fall for the first time in five sessions, weighed down by renewed concerns over economic growth after U.S. President Donald Trump vowed more strikes on Iran and gave no specific timeline on ending the conflict

• Shares of Global mining giants Rio Tinto and BHP Group fall 2.6% and 3.1%, respectively

• Copper miners Southern Copper and Freeport-McMoRan down 3.6% and 3.2%, respectively

• Canada's Hudbay Minerals , slides 4.2%, Ero Copper , down 2.7% and Teck Resources , falls 4.1%

(Reporting by Pooja Menon in Bengaluru)

• AUD/USD falls to 0.6867 as global stock losses weigh on risk-sensitive AUD

• Kospi down 4.47%; Nikkei down 2.38%. European shares fall more than 1%

• 0.6867 is the lowest level since Tuesday (0.6963 was one-week high Wednesday)

• Support points include 0.6834 (nine-week low, Monday-Tuesday) and 0.6800

• Australia February good trade surplus A$5.7 billion vs A$2.85 billion

• U.S. March NFP data due on Good Friday; 60k expected (Reuters poll)

AUDUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

• Cable drops to 1.3202 as safe-haven dollar rises after Trump vows more strikes on Iran

• 1.3202 is the lowest level since Tuesday (1.3345 was intra-week high Wednesday)

• Oil prices jump, stocks sink on Trump's Iran war guidance

• GBP/USD support points include 1.3172 and 1.3160 (Tuesday's four-month low)

• 1.3172 was Ldn/NY session low Tuesday (after quarter-end fix-related selling of GBP)

• JPMorgan no longer expects BoE to hike on April 30, after dovish Bailey guidance

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

• EUR/USD was falling from 1.2084 toward 1.1700 before Iran conflict

• The 1.0125-1.2084 rise had become stretched and traders very long euro

• A minor correction of that rise was highly likely to unfold

• The target for a minor correction is 1.1336

• Traders long euro before this week's rally are likely longer of euros now

• While war endures there is a heightened chance that pair reaches 1.1336

•
EURUSD


(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• Shares of Australia's Savannah Goldfields rise as much as 33.3% to A$0.016, their biggest intraday pct gain since October 1, 2025

• Stock set for its second consecutive session of gains, if current trend holds

• Gold explorer says it recommenced gold processing operations at its Georgetown Gold Project in Australia on March 27

• Says resumption of mining at Agate Creek in Georgetown to commence in Q2 CY2026

• Stock down 21.1% YTD

(Reporting by Aamir Sheik Khalid in Bengaluru)

• EUR/USD off from early Asia high of 1.1605 to 1.1544 EBS post-Trump speak

• Trump suggested possible escalation, prolongation of Iran conflict

• Risk mood deteriorates fast, USD back bid

• EUR/USD testing towards ascending hourly Ichimoku cloud between 1.1510-38

• 200-HMA at 1.1548 pierced to downside, 100-HMA 1.1525 in cloud

• Total E2.7 bln option expiries today between 1.1500-40 likely supportive

• Above, E1.1 bln E1.2 expiries 1.1590-1.1600, also 1.1650 E1.3 bln, to cap?

• EUR/JPY 183.84-184.05 EBS, mostly in stasis, both JPY and EUR weaker vs USD

• EUR/CHF too, 0.9195-0.9205 EBS, follows 0.8981-0.9266 Thursday-Tuesday rally

• EUR/GBP tad better bid, 0.8712-18, up from 0.8705 low yesterday

• Related , for more click on [FXBUZ]

EUR/USD hourly:


EUR/CHF hourly:


EUR/GBP hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• Risk off again, Trump suggests conflict escalation, prolongation in address

• Most major currencies down on back of this, USD bid again

• EUR/USD from early Asia high of 1.1605 pre-address to 1.1546 EBS after

• Holding above this low for now, 200-HMA at 1.1549 pierced briefly

• 100-HMA 1.1525 below, in ascending hourly Ichimoku cloud between 1.1510-35

• EUR/USD sogginess likely to persist, perhaps increase when Europe returns

• Related , for more click on [FXBUZ]

EUR/USD hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• AUD/USD flat Thur as mixed messaging on Iran war leave markets sceptical

• AU Feb balance on goods A$5.7 bln surplus (poll +2.85 bln), exports +4.9%

• Trump addressing nation on Iran war at 0100 GMT, threatens NATO exit

• Iran denies requesting ceasefire, Wed's sentiment uplift given reality check

• AUD upswing running out of momentum, drift toward 0.6900 looking likely

• Pivotal Mar U.S. non-farm payrolls due Fri, Reuters poll consensus +60k

• Range Asia 0.6920-29, support 0.6834 0.6660, resistance 0.7188 0.7282
AUD Daily Bollinger Study & DXY Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• USD/JPY in stasis ahead of US Pres Trump's address to the nation

• Asia so far 158.55-77 EBS, well within yesterday's 158.28-159.00 range

• Trump to suggest Middle East conflict over? Some deal with Iran?

• Market on tenterhooks ahead of speech, could react either way

• Key levels to watch 160.47 high March 30, 157.51 low March 19

• In terms of techs, descending hourly Ichimoku cloud 159.07-51 above

• 200 and 100-HMAs in cloud at 159.24 and 159.40, respectively

• In options, expiries today between 157.20-50 $1.2 bln, 159.00 $918 mln

• Also 159.50-55 total $735 mln, 159.75 $858 mln, 160.00 $1.1 bln

• Related comments , , ,

• Also , on Fed, US Treasuries ,

• US markets , , ,

• On US economy , ,
USD/JPY:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• Australian gold stocks advanced as much as 3.1% to their highest since March 13

• Bullion prices rise for fourth straight session as the U.S. dollar weakened on hopes of a potential de-escalation in the Middle East. [GOL/]

• Gold miners Northern Star Resources and Ramelius Resources rise as much as 4.1% and 4.4%, respectively

• Sub-index down 2.8% so far this year, including the session's moves
(Reporting by Keshav Singh Chundawat in Bengaluru)

• NZD/USD -0.3% from Wed 0.57775 high, but safely clear of wtd lows

• Iran denies requesting ceasefire, Wed's sentiment uplift given reality check

• Trump threatening to remove U.S. from NATO, will address nation late Wed

• Crucial Mar U.S. non-farm payrolls due Fri, Reuters poll consensus +60k

• Commodity currencies remain captive to Middle East war news for time being

• NZD downtrend remains in place, but has headroom for bear market rally

• Range NZ 0.57436-74, support 0.5700 0.5580, resistance 0.5891 0.5918 0.6092
NZD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

MUFG Research expect the recovery in risk to be fragile but anticipates a return to USD structural weakness once the conflicts ends.

"The recovery in risk is likely to remain fragile with doubts set to return over the improvement in energy supply conditions. What we would say though in relation to FX is that the US dollar will look even more vulnerable following this conflict (again if it ends like being suggested)," MUFG notes.

"The decision to attack Iran will leave the region extremely unstable and inflation risks will likely continue to undermine the Trump administration ahead of the mid-terms in November. Data shows the largest reduction in custody holdings of UST bonds held by foreign central banks at the Federal Reserve since covid in 2020 and prior to that since 2014," MUFG adds.

• AUD/USD +0.4% late Wed as improved risk sentiment moderates slightly

• Iran foreign ministry says claims of ceasefire request are not true

• Trump threatens to quit NATO, will address nation late Wed

• DXY -0.4%, Brent crude -3.4%, gold +1.9%, U.S. equities rally

• AUD remains news flow captive with support/resistance widely dispersed

• AU Feb balance of trade due Thur, Reuters poll consensus 2.85 bln surplus

• Crucial Mar U.S. non-farm payrolls due Fri, Reuters poll consensus +60k

• Overnight range 0.6913-635, support 0.6834 0.6660, resistance 0.7188 0.7282
AUD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• EUR/USD opened near near 1.1600 after the pair rallied overnight due to upbeat risk

• Risk remained upbeat early NY; US$, yields traded softly

• USD/CNH fell below 6.8720 & gold, stocks rallied to reinforce risk-on trading

• Drop in oil reinforced risk-on, EUR/USD hit 1.1627, it traded to a 5-session high

• US yields, US$ firmed up however, EUR/USD neared 1.15195, was up only +0.36% late

• Move above 10- & 21-DMAs, trend line off Jan. high, rising daily RSI a bullish signals
eurusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• NY opened near 0.6940 after 0.6898 traded overnight, rally extende in early NY

• Lower US yields , US$ & USD/CNH's drop to 6.8719 helped the lift

• US$ selling abatedhwoever & yields then firmed, AUD/USD pulled back

• The pair dipped below 0.6935 then neared 0.6940 late, was up +0.59%

• Rallies in gold, silver, copper & equities helped AUD/USD hold most gains

• Rsing daily RSI, piercing of the 10-DMA give AUD/USD bulls some comfort
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Goldman Sachs Research likes short EUR/JPY as a hedge for the next leg of the energy price shock.

"We prefer x-JPY lower expressions to hedge the next leg of the energy price shock," GS notes

"Particularly ones like short EUR/JPY that should be 1) less vulnerable to a rebound than other pairs in de-escalation, e.g., SEK/JPY and AUD/JPY, and 2) more closely correlated with TTF prices, which our commodity strategists expect to rally further. Our favorite hedge, however, continues to be long USD/SEK," GS adds.

By Justin McQueen

Apr 1 (Reuters) - Cable squeezed back up through 1.33, but this looks to be more short covering than a meaningful trend reversal. From here, further topside is likely to be harder to come by, with the 200-day MA and recent highs sitting at 1.3428-50, which will make it difficult to bulls for chase aggressively.

The equity rally – biggest 1-day rip since May – looks more emblematic of a bear market rally than a genuine all-clear. The Strait of Hormuz is still largely shut, and the prospect of U.S. ground troops in Iran ahead of the long weekend has not been taken off the table, which now, risk assets are not as well priced for. Eyes on U.S. President Donald Trump at 0100GMT, though his remarks that the Iranian President asked the U.S. for a ceasefire was met with a muted reaction, which is telling about the lack of appetite to chase in either direction. Unless there is something credible on the de-escalation front, there is a risk that the rally in equities loses steam.

Given GBP’s higher beta to risk assets, any rollover puts 1.32 back on the table in short order. On the domestic front, Bank of England Governor Andrew Bailey struck a relatively dovish tone compared with market pricing, saying that markets are getting ahead of themselves in pricing rate hikes – currently two by year-end -- though he kept the door open for a precautionary rate rise if needed.

The key takeaway for GBP is that Bailey comes across as a reluctant hiker, and history suggests a forced BoE hike – 2022 the most recent occasion – does not lead to a durable GBP bid. With the next meeting still a few weeks out and pricing having swung wildly over the past month, conviction here is low in either direction.
beta to fx


GBP daily chart


Justin McQueen is a Reuters market analyst. (The views expressed are his own) ((Email: ))