CIBC Research discusses the scope of the coming review of the USMCA trade agreement.

"Our base case assumes that the US remains in an amended USMCA trade agreement after this year’s review, with Canadian exporters retaining tariff free access to the US market for goods that currently are excluded from sectoral tariffs and qualify under the agreement. There is scope for a reduction in aluminum tariffs given the lack of domestic supply stateside, but we are less optimistic on tariff reductions for other sectors," CIBC notes.

"Progress on renewing the USMCA trade agreement ahead, combined with measures aimed at boosting domestic demand for tariff-impacted sectors, will help drive an acceleration in the Canadian economy later in the year. Until then, however, the CAD will remain under pressure, with USDCAD expected to be 1.39 at mid-year. An appreciation is likely thereafter on an improvement in the economy which could coincide with the Fed cutting rates if the oil shock is behind us, and we look for USDCAD to end the year at 1.35," CIBC adds.

• AUD/USD +1.7% from Mon 0.6979 low as latest oil price spike moderates

• DXY -0.3% as risk sentiment improves, markets look beyond peace-talk failure

• Iran threatens retaliation after U.S. maritime blockade begins

• RBA Deputy Governor Andrew Hauser speaking in New York 2115 GMT Mon

• AUD pushing upper hourly Bollinger band, topside momentum likely to slow

• Overnight range 0.70305-0.71005, support 0.6834 0.6660, resistance 0.7188
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

The dollar slipped on Monday on signs U.S.–Iran talks were continuing and as strong earnings pushed the S&P 500 to its highest level since early March. U.S. President Donald Trump said Iran wants a deal, reiterated he will not allow Tehran to obtain nuclear weapons, and noted that 34 ships transited the Strait of Hormuz on Sunday. Optimism persisted even as the U.S. moved to block ships departing Iran’s ports. Pakistani Prime Minister Shehbaz Sharif said full efforts are underway to resolve the U.S.–Iran conflict while Chinese Foreign Minister Wang Yi urged restraint to avoid escalation. Iran warned that foreign military action in the Strait of Hormuz or Sea of Oman would escalate tensions and that U.S. intervention would fail. Goldman Sachs beat expectations for quarterly profit and both J.P.Morgan and Morgan Stanley said recent market weakness has created buying opportunities for long-term investors. Chicago Fed President Austan Goolsbee said oil markets expect the Iran war–driven price spike to be short-lived, limiting the economic impact. EU Commission President Ursula von der Leyen said restoring freedom of navigation in the Strait of Hormuz is of “paramount” importance. Hezbollah chief Naim Qassem called on the Lebanese government to cancel a Tuesday meeting between the Lebanese and Israeli ambassadors in Washington.

The dollar index fell below its 200-day and 55-day moving averages, sliding to its lowest level since March 2, putting bears in control despite a lingering gap higher.

EUR/USD bounced in New York to around 1.1735 as improving risk appetite weighed on yields and the dollar, with bullish technicals pointing to further upside.

GBP/USD held firm as risk appetite improved, putting the early-March high near 1.35 back in view.

USD/JPY printed an inverted hammer near 160, hinting at a possible top, though a close below the 21-DMA and Tenkan-sen is needed to neutralize the bullish bias as risk tone improves.

AUD/USD rebounded to around 0.7090 as a risk-on turn weighed on the dollar, with stocks firmer and technicals turning bullish.

Treasury yields were down 1 to 2 basis points with the 2s-10s curve steady at +51.6bp.

The S&P 500 rose 0.58%.

WTI oil was up about 2% though was well off session highs.

Gold was little changed while copper gained about 2%.

Heading toward the close: EUR/USD +0.34%, USD/JPY +0.03%, GBP/USD +0.33%, AUD/USD +0.42%, DXY -0.25%, EUR/JPY +0.33%, GBP/JPY +0.33%, AUD/JPY +0.55%.(Editing by Burton Frierson Reporting by Robert Fullem)

• NY opened near 1.1695 after 1.1659 traded overnight, 1.1680 was neared in early NY

• Buyers emerged as risk-off sentiment shifted and riskier assets rallied

• US yields , U$ turned lwoe ron the session; USD/CNH fell to 6.8204

• Stocks turned positive while gold & silver erased most earlier losses

• EUR/USD rallied above the daily cloud base then turned positive on the session

• 1.1739 traded before EUR/USD dipped slightly, sat near 1.1735 late, was up +0.08%

• Techs lean bullish; RSIs are rising, daily bull hammer formed, pair is above 200-DMA
eurusd


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

ANZ Research discusses the USD outlook and warns about chasing the USD lower from current levels.

"We are cautious about chasing the USD lower on a tactical basis and think 98 on the DXY is a floor for now as oil prices are unlikely to return to pre-March levels in the coming months. So an oil premium will likely remain attached to the USD, unless lower-than-expected tariff revenue and increased defence spending worsen the US fiscal outlook and offset some of this. But that would be a few months away," ANZ notes.

US economic data surprises continue to be resilient compared to other global economies. This is important because if the Middle East conflict drags on, higher energy prices would favour the US compared to energy importing economies and may see a return of ‘US exceptionalism’. But it is too early to draw this conclusion. Labour market indicators in March , specifically, robust payroll growth and a lower unemployment rate, do not strongly support the case for markets to price-in rate cuts," ANZ adds.

• AUD/USD fell below the daily cloud top, 55-, 21- & 10-DMAs earlier due to risk-off

• A three-session low was struck but buyers emerged as risk sentiment improved

• US yields , US$ turned lower as safe-haven bids faded away

• Stocks turned up, USD/CNH turned down, gold & silver eroded most of their losses

• AUD/USD rallied above the cloud top, 10-, 21- & 55-DMA and turned positive

• 0.7079 traded in NY's afternoon; pair's rally has techs flashing bullish signals now

• Daily RSI turned upward, a large daily bull hammer candle formed, monthly RSI rising

• Bull hammer formed after 10- & 21-DMAs pierced, gives the hammer more credence

• 0.7095-0.7125 area is resistance, if cleared the March monthly high comes into focus
audusd


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

Goldman Sachs Research sees a scope for downside GBP/USD expressions over the coming 2 months.

"Overlaying more UK-specific considerations with the global backdrop of the evolving energy shock, we think the clearest alignment is in using Sterling downside as a re-escalation hedge-but now best suited to tactical GBP/USD downside rather than tactical EUR/GBP upside. Meanwhile, a more concerted shift towards de-escalation should drive Sterling strength from here, helped in particular by its high-beta characteristics," GS notes.

"But with GBP/USD already having rebounded close to pre-shock levels, and with UK-specific factors leaning toward Sterling underperformance in our view, we think downside GBP/USD expressions over the coming two months offer the greater asymmetry," GS adds.

Sterling is poised for a period of heightened volatility as traders weigh significant geopolitical risks against a heavily short-positioned market that could be ripe for a squeeze.

The dollar has caught a fresh bid today following the announced U.S. blockade of the Strait of Hormuz, a move that sent oil prices surging and bolstered the greenback while leaving traditional safe havens like the yen, Swiss franc and gold relatively weaker. Despite this current pressure, the pound had recently trended higher on the back of previously upbeat Middle East negotiations.

Crucially, sterling net speculative IMM positioning has remained remarkably steady over the last few weeks at around -55,000 contracts. Given the sheer size of this net short position, any positive turn in reports regarding Middle East tensions and an ensuing risk rally is likely to lift GBP/USD, putting late-February highs near 1.36 back into focus.

However, sterling bulls would still have to contend with lingering UK fiscal concerns, which remain a persistent headwind as the domestic inflation and growth outlook remains notably challenging.

Technically, the pair is currently battling resistance at the falling daily cloud base at 1.3454. A sustained move into the daily cloud, spanning 1.3454-1.3561, would open the door toward the upper Bollinger Band at 1.3509 and the daily cloud top. Conversely, initial support sits at the 200-day moving average of 1.3414, followed by today's Hormuz-related blockade flash low at 1.3383. Failure to hold this level may lead to a test of the 21- and 10-DMAs just ahead of 1.33, marking a shift in the near-term bias.
Sterling Chart:


(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

Bank of America Global Research highlights the key findings from its latest FX and Rates Sentiment Survey.

"Respondents aggressively covered USD shorts on the outbreak of the war in Iran. Since the last survey, positions and views are broadly unchanged. This reflects that investors view the Iran war as more of a level shift to the USD path for 2026 than a change in the trend," BofA notes.

"Continued USD bearishness is driven by growth concerns dominating inflation worries. And for example, investors remain convinced that the Fed will err on the dovish side," BofA adds.

MUFG Research discusses EUR/USD outlook in light of high oil prices.

"After of six weeks of conflict to the point of the ceasefire, it is clear that the US dollar has underperformed our expectations based on our original expected moves. Based on a 40%ish move higher in crude oil prices we would have expected to see a EUR/USD drop of 3% or so. The EUR/USD rate is currently 1.0% lower. The change in swap spreads against the dollar and the lack of risk-off trading conditions have helped contribute to that," MUFG notes.

"Under our new Scenario 1 of crude remaining around current levels before slowly retracing from Q3 onwards, we would expect to see EUR/USD trade around current levels to lower before moving higher in the second half of the year," MUFG adds.

• AUD/USD fell below the 21-DMA overnight on report of US Navy blockade

• The pair hit 0.6979 as risk soured with help from oil

spiking higher

• Risk improved however; US yields , US$ softened, USD/CNH neared flat

• Gold , silver , equities erased a portion of overnight losses

• AUD/USD rallied above the 21- & 55-DMAs and daily cloud top, hit 0.7058 in Europe

• NY opened near 0.7050, the pair traded down only -0.24% in early action

• A daily bull hammer candle formed which is likely a concern for AUD/USD bears
audusd


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

• U.S.-listed shares of silver miners fall premarket, tracking a decline in prices of the metal [GOL/]

A** Spot silver down 2% at $74.36 per ounce, as renewed fears of a wider Middle East conflict spurred by failed U.S.-Iran talks boosted oil prices, fueled inflation concerns and reduced expectations of U.S. Federal Reserve rate cuts this year

• Hecla Mining drops 2%, Coeur Mining falls 2.6%

• Canadian miners Endeavour Silver and Silvercorp Metals fall 2.3% and 4.1%, respectively

• Abrdn Physical Silver Shares ETF and iShares Silver Trust ETF each dip 2.6%

(Reporting by Pranav Mathur in Bengaluru)

• U.S.-listed shares of gold miners down premarket, tracking lower bullion prices [GOL/]

• Spot gold down 0.6% at $4,719.54/ounce

• Bullion prices decline as renewed fears of a wider Middle East conflict spurred by failed U.S.-Iran talks boosted oil prices, fueled inflation concerns and reduced expectations of U.S. Federal Reserve rate cuts this year

• Top miners Newmont and Barrick Mining fall 2% and 1.7% respectively

• South African miners: Gold Fields , AngloGold Ashanti both down 1.4% and Harmony Gold inches down ~2%

• Canadian miners: Agnico Eagle Mines dips 1.2% and Kinross Gold slips 1.6%

(Reporting by Dharna Bafna in Bengaluru)

• USD/JPY nears 160. Hits high of 159.85 as oil breaks above $100/bbl

• U.S. to impose a blockade in the Strait of Hormuz after weekend talks failed

• Geo risk premium creeps in but moves stay contained - ceasefire holds for now

• Topside conviction limited with lack of appeal to chase through 160

• Key resistance stands at 160 (weekly high)/160.47 (Mar high)

• Support seen at 158, stronger cushion down at 156.89/157.11 (100/55DMAs)
USDJPY daily chart


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

• AUD/USD hits 0.7058 (intra-day high) after extending north from 0.6979

• 0.6979 was Asia low, after safe-haven USD strengthened on Middle East news

• U.S. to blockade Iran ports after weekend talks failed to yield a deal

• 0.6979 was the lowest level since April 8 (0.6969 was the low that day)

• Offers expected pre-0.71 (0.7092 was Friday high; 0.7094 was Thursday high)

• CFTC data showed net AUD long fell 13% to 70,813 contracts in week to April 7

AUDUSD


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

• Cable slid to threaten 1.3383 in Asia as safe-haven USD rose on Middle East news

• U.S. to blockade Iran ports after weekend talks failed to yield a deal; oil above $100

• 1.3383 was Thursday's low (1.3382 was Wednesday's NY session low)

• The high water-mark since the Asian session drop to threaten 1.3383 is 1.3415

• Friday's high was 1.3478 (after dollar fell on cooler than expected U.S. CPI data)

• CFTC data showed net GBP short rose 7% to 56,354 contracts in week to April 7

GBPUSD


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

• Shares of Australia's St. Barbara fall as much as 6.9% to A$0.68, on track for their worst session since March 23

• Gold miner posts Simberi's third-quarter gold production of 13,522 ounces vs 14,053 ounces reported a year ago

• Anticipates Q4 gold production for the New Semberi Gold Project of 14,000-17,000 ounces, compared to 14,620 ounces a year earlier

• Stock up 20.7% YTD, including the session's moves

(Reporting by Anjali Singh in Bengaluru)

• GBP/USD -0.4% Mon as markets calibrate weekend U.S.-Iran developments

• GBP failure to hold above 1.3460 55-DMA will invigorate sellers

• Iran war re-escalation becomes genuine threat after peace talks fail

• WTI +8.5%, Brent crude +7.3% after Trump announces Strait of Hormuz blockade

• UK Feb GDP, industrial output, trade balance updates all due Thur

• Range Asia 1.33835-1.3442, support 1.3160 1.3040, resistance 1.3867 1.4250
GBP Daily 55-DMA

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

• AUD/USD -0.4% Mon but recovering from a steeper post-open rout

• Fear of Iran war re-escalation hits risk appetite after peace talks fail

• U.S. Strait of Hormuz blockade sends energy prices higher, WTI +8.1%

• AUD recovery likely to run out of momentum near Mon 0.7040 open

• RBA Deputy Governor Andrew Hauser speaking in New York Mon evening

• Range Asia 0.6979-0.7040, 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.)

• Middle East war concerns with US-Iran talks seen at impasse

• US threatens to blockage Hormuz Strait, talks to continue in Islamabad?

• Ceasefire looks to be holding for now but to last the 2 weeks eyed?

• USD bid across the board, USD/JPY 159.35-85 EBS so far in Asia

• Some switch in market focus to central bank announcements

• Japan TradeMin Akazawa hints BOJ policy option to raise yen, tame inflation

• Boost to expectations for BOJ to up rates at end-April meeting?

• Fed on other hand looks to remain pat for now, inflation and growth concerns

• JGB-US Treasury rate diffs narrower, in 2s @, 10s @238 bps, 10s @186 bps

• Threat of Japan FX intervention higher too, 160.00 area still line in sand

• USD/JPY support on dips towards 159.00, Japanese importer, other bids eyed

• Large nearby option expiries today between 159.50-55 $1 bln, 160.00 $761 mln

• Related comments , , ,

• And , also , on Iran war ,

• US markets , , ,

• On Akazawa-speak/BOJ ,

• On US data , , for more click on [FXBUZ]

USD/JPY:


JGB-US Treasury interest rate differential:


NYMEX crude oil futures:

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

• GBP/USD -0.6% Mon in wake of weekend U.S.-Iran peace talk stalemate

• Oil prices surge (WTI +8.8%) after U.S. announces Strait of Hormuz blockade

• Broad USD index up 0.5% on safe haven inflow, risk sentiment dives

• GBP fails to hold above 1.3460 55-DMA, downside momentum gathering pace

• U.S. Mar core CPI +0.2% m/m, +2.6% y/y (poll +0.3%, +2.7% respectively)

• UK Feb GDP, industrial output, trade balance updates all due Apr 16

• Range Asia 1.33835-1.3442, support 1.3160 1.3040, resistance 1.3867 1.4250
GBP Daily 55-DMA

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

• NZD/USD -0.7% Mon after failure of U.S.-Iran weekend peace talks

• Trump says will blockade the Strait of Hormuz, stokes energy crisis

• More hawkish sounding RBNZ comments that lifted NZD fading in relevance

• Pair fails to hold above 0.5847 200-DMA, possible resumption of downtrend

• NZ Mar electronic card retail sales due Fri, prior +1.4% m/m, +1.5% y/y

• Range NZ 0.5790-0.5830, support 0.5680 0.5580, resistance 0.5918 0.6092
NZD Daily 200-DMA

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

• AUD/USD -1.3% in early trade Mon as U.S.-Iran fail to reach peace agreement

• Trump vows to blockade the Strait of Hormuz, refreshes oil price pressure

• AUD pushing hourly lower Bollinger band, oversold but remains news driven

• RBA Deputy Governor Andrew Hauser speaking in New York Mon evening

• U.S. Mar core CPI +0.2% m/m, +2.6% y/y (poll +0.3%, +2.7% respectively)

• Range Asia 0.6980-0.7040, support 0.6834 0.6660, resistance 0.7188 0.7282
AUD Hourly Bollinger Study & DXY Daily

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

• EUR net spec position shifts to short of 7,541 contracts as of Tuesday from long of 507 contracts last week

• JPY net spec short grows to 93,742 contracts vs previous week's short of 72,872

• GBP net spec short edges up to 56,354 from short of 52,665

• AUD long shrinks to 70,813 from long of 81,506

• MXN long 57,471 vs long of 57,684

• CHF short 30,694 vs short of 29,871

• NZD short 36,075 vs short of 28,588

• CAD short jumps to 55,648 from short of 32,684

EUR spec IMM


(Burton Frierson)