Forex News

Deutsche Bank strategists highlight sharp volatility in Brent Oil as Middle East ceasefire doubts resurface. Brent initially slumped over 13% to a four-week low near $95, then rebounded above $96 as concerns about Hormuz shipping and ceasefire durability persisted. They note more modest declines further out the curve and easing stagflation fears.

Ceasefire uncertainty drives sharp reversals

"So overall, even with the question marks around a ceasefire, the fact one had been agreed led to a huge wave of optimism, with investors feeling much clearer about the path to a de-escalation. Most directly, the prospect that the Strait of Hormuz might reopen led to a big decline in oil prices, with Brent crude (-13.29%) down to a 4-week low of $94.75/bbl, whilst WTI (-16.41%) fell to $94.41/bbl."

"However, with persisting restrictions on Hormuz shipping, the declines were more modest further out the oil curve, with the 6-month Brent future (-2.33%) closing at $81.19/bbl, still above its levels late last week."

"As we go to press this morning, oil prices are creeping up again as several questions remain about the ceasefire announced on Tuesday night. A few factors have driven that, but it’s pushed Brent crude oil (+2.34%) back up to $96.97/bbl, and it’s also taken the momentum out of the market rally overnight."

"So even with all the volatility of recent weeks it was another day of historic moves, and the overnight move for Brent crude this morning (+2.34%) still leaves us well beneath the pre-ceasefire oil price of around $110/bbl."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

OCBC strategists Sim Moh Siong and Christopher Wong highlights Australian Dollar (AUD) as the preferred G10 expression of de-escalation and pro-growth after the US-Iran ceasefire. They note that high-beta energy importers like Swedish Krona (SEK) and New Zealand Dollar (NZD) led the snapback, but AUD stands out as a pro-cyclical currency relatively resilient to energy shocks and potentially supported by firmer industrial metals prices if global growth improves.

Pro‑cyclical play with growth leverage

"In G10 FX, high-beta energy importers such as SEK and NZD led the snapback after being the main underperformers during the conflict."

"Our preferred relief trade remains AUD."

"It is not only a pro-cyclical currency that is relatively resilient to energy shocks, but it could also benefit from firmer industrial metals prices if further de-escalation lifts global growth as the energy shock fades."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Silver wavers at $74.00 after pulling back from weekly highs at $77.65.
• Concerns about the fragility of the ceasefire in Iran are weighing on precious metals.¡
• XAG/USD is hovering right above the bottom of the near-term ascending channel.

Silver (XAG/USD) is looking for direction at $74.00 on Thursday, after pulling back from Wednesday’s highs at $77.65. The precious metal lost its shine as the market turned cautious with the first cracks emerging in the US-Iran ceasefire deal.

Iranian authorities complained on Wednesday about violations of the ceasefire agreement, after a massive attack killed 182 people in Lebanon, and closed the Strait of Hormuz again. The US and Israel said that Lebanon was not in the deal, and US President Donald Trump warned Iran of further “action” if the terms of the deal are not complied with.

The peace process, nevertheless, remains alive. Tehran and Washington announced that they will send respective delegations to start direct negotiations in Pakistan this weekend. Investors, however, remain wary of the fragility of the ceasefire, which is keeping the US Dollar buoyed and demand for precious metals subdued on Thursday.

Technical Analysis: Nervous consolidation at the channel bottom

XAG/USD is trading just above the rising channel floor, with 4-hour indicators showing a lack of clear bias. The Relative Strength Index (RSI) is flat around the 50 line, suggesting a balanced momentum, and the Moving Average Convergence Divergence (MACD) is marginally below zero, hinting at a moderate bearish pressure.

A confirmation below the mentioned trendline support, now at $73.25, would expose Tuesday´s low, at $68.20, ahead of the March 23 low, at $61.00. The measured target of a potential Bearish Flag formation is the $52.00 area.

On the topside, ithe 50% Fibonacci retracement of the late-March downtrend, at $78.95, has been capping bulls this week. Further up, the 61.8% retracement at $83.15, and the channel top, at $84.50, are the next targets.

(The technical analysis of this story was written with the help of an AI tool.)

(This story was corrected on April 9 at 09:50 GMT to say that the $68.20 low is Tuesday's low and not Monday's as previously reported.)

Silver prices (XAG/USD) fell on Thursday, according to FXStreet data. Silver trades at $74.11 per troy ounce, down 1.08% from the $74.92 it cost on Wednesday.

Silver prices have increased by 4.26% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 63.85 on Thursday, up from 63.01 on Wednesday.

(An automation tool was used in creating this post.)

Brown Brothers Harriman’s Elias Haddad (BBH) notes that interest rate differentials are keeping the US Dollar Index (DXY) in a 96.00–100.00 range, even as recent ceasefire optimism faded on compliance doubts. Haddad maintains a structurally bearish US Dollar (USD) view, expecting only one 25 bps Federal Reserve (Fed) cut by year-end as February US Personal Consumption Expenditures Price Index (PCE) data are unlikely to alter rate expectations.

DXY capped by rate differentials

"Brent crude oil prices are up 8% after dropping to near a one month low at $90.40 a barrel yesterday. The equity and bond market rally stalled, while the DXY (USD index) rebounded following a test of its 200-day moving average yesterday."

"Bottom line: interest rate differentials between the US and other major economies still anchors the DXY index within a 96.00-100.00 range. Structurally, we maintain our long-held bearish USD view because of fading confidence in US trade and security policy, worsening US fiscal credibility, and the ongoing politicization of the Fed."

"Today, the February PCE will capture the pre-shock US inflation and consumer spending backdrop (1:30pm London, 8:30am New York). As such, the data is unlikely to shift the dial on Fed funds rate expectations, which currently implies nearly even odds of a 25bps cut over the next twelve months."

"Headline PCE is seen at 2.8% y/y for a second straight month, core PCE is expected to dip 0.1pts to 3.0% y/y, and real personal spending is forecast to rise by 0.2% m/m vs. 0.1% in January. For reference, at its March 17-18 meeting, the FOMC’s median 2026 projection for both headline and core PCE stood at 2.7%."

"The FOMC March 17-18 meeting minutes underscored the two-sided policy risks from a protracted conflict in the Middle East. “Most” participants raised the concern that a lengthy war could warrant additional rate cuts to support the labor market, while “many” would favor rate increases to help bring inflation down to the 2% target. Provided the energy shock continues to fade, we expect the Fed to deliver one 25bps cut by year-end, in line with the FOMC’s projection."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Nordea’s Group Chief Economist Helge J. Pedersen highlights that Eurozone inflation has risen with higher energy prices but remains well below 2022 levels. He stresses that strong household savings, low unemployment and ongoing investment in infrastructure and defense should cushion growth. Nonetheless, falling confidence indicators and tighter financial conditions pose downside risks if the conflict escalates.

Inflation rises but growth shock limited

"In March, inflation in the eurozone thus came out at 2.5%. This was a significant increase from the month before, when it was at 1.9%, but still far below the level in 2022, when oil prices were even higher than today, and when not least the price of natural gas went completely wild."

"At that time, it peaked for a short period just under 350 euros per MWh, and the EU had to introduce a maximum price of 180 euros per MWh in almost panic mode. In comparison, the natural gas price in Europe is currently at 'only' about 50 euros per MWh."

"This is high and hits European companies and households, but not necessarily to an extent that leads to a deep economic downturn or calls for fiscal easing."

"And certainly not when it is taken into account that household savings are at record highs, unemployment is low, and billions of euros are already being pumped into infrastructure projects and not least defense."

"But of course there is always a risk that things will go worse than expected, and the economies also risk being hit by developments in the financial markets, where the war has also left its mark in the form of falling stock prices and rising interest rates."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• AUD/JPY rises as Japanese Yen weakens on oil rebound, with Japan highly exposed to Middle East supply risks.
• Markets expect more expansionary BoJ fiscal policy if the Middle East conflict becomes prolonged.
• Markets now expect an RBA May hike, with rates projected to reach 4.61% by year-end amid inflationary pressures.

AUD/JPY extends its winning streak for the fourth successive session, trading around 111.70 during the European hours on Thursday. The currency cross gains as the Japanese Yen (JPY) weakens, with oil prices rebounding amid ongoing uncertainty surrounding the US-Iran ceasefire. It is worth noting that Japan remains highly sensitive to Middle East oil supply dynamics.

The JPY also faces pressure as markets increasingly expect fiscal policy to turn more expansionary if the Middle East situation becomes prolonged, according to Sho Suzuki, market analyst at Matsui Securities.

Bank of Japan (BoJ) Governor Kazuo Ueda stated that short- and medium-term interest rates remain clearly negative, with accommodative financial conditions supporting a moderate rise in capital expenditure, Reuters reported.

However, the upside in the AUD/JPY cross may be capped as the Australian Dollar (AUD) struggles amid fading US-Iran ceasefire optimism, with reports indicating the 10-point framework still lacks full commitment from both sides, leaving the agreement fragile and incomplete.

The Middle East conflict, now in its second month, has pushed energy prices higher and heightened inflation risks, reinforcing expectations that global central banks may maintain tighter policy for longer.

The Reserve Bank of Australia (RBA) has already lifted rates by 50 basis points to 4.10% in response to persistently elevated inflation. Markets are now pricing in another rate hike in May, with rates projected to reach 4.61% by the end of the year.