(fix spelling line 3) The dollar advanced with oil on Wednesday as investors questioned the durability of the U.S.–Iran ceasefire and after data showed another record in U.S. crude exports. Iran seized two ships in the Strait of Hormuz on Wednesday, tightening its grip on the strategic waterway after U.S. President Donald Trump called off attacks with no sign of peace talks restarting. U.S. Treasury Secretary Scott Bessent said both the United Arab Emirates and the U.S. would benefit from a currency swap lines as they prevent forced liquidations, and other Gulf allies have requested similar facilities.
The dollar index briefly pushed above its 200-day moving average, but gains were tempered by subdued volatility as AI-linked shares continued their April rally and earnings underpinned Wall Street. A lingering gap from April 8 hints at further gains toward 99.50. Prime Minister Mark Carney said that Canada will not let the United States dictate the terms of the upcoming USMCA review. EUR/USD slid against a firmer dollar, pressured in part by growth worries after Italy and Germany cut growth forecasts, leaving the pair vulnerable ahead of PMI data Thursday. ECB’s Lane says it’s too early to judge whether the Iran war’s impact on the euro-zone economy will be temporary or lasting.
GBP/USD edged modestly higher on cross-flow support and a gilt-driven yield advantage, but remains pinned near trend lows with resistance from 1.3545 up to the upper Bollinger band at 1.3612 limiting upside.
AUD/USD dipped briefly before rebounding on commodity and equity strength, with supportive technicals helping keep the near-term bias mildly constructive ahead of Australia PMIs.
USD/JPY rose for a third day on higher oil and U.S. equities, with improving technicals pointing toward 160, though muted volatility and intervention risk are capping momentum.
Treasury yields were up as much as 2 basis points as the curve flattened. The 2s-10s curve was down about 1 basis point at +50.0bp.
The S&P 500 rose 0.79% fueled by tech and energy shares.
WTI oil gained 3.7%.
Gold rose 0.6%, copper rallied 2.2% and bitcoin jumped over 4%
Heading toward the close: EUR/USD -0.29%, USD/JPY +0.05%, GBP/USD +0.03%, AUD/USD +0.11%, DXY +0.20%, EUR/JPY -0.22%, GBP/JPY +0.06%, AUD/JPY +0.18%.(Editing by Burton Frierson Reporting by Robert Fullem)
