Forex News
- WTI Crude Oil remains steady below the $90.00 line with traders awaiting developments in the Middle East.
- Trump has boosted expectations that the US-Iran peace talks will resume soon.
- News about negotiations between Israel and Lebanon has contributed to boosting investors' optimism.
Crude prices edge up on Thursday, but remain trading within the previous day’s range. The price of the US benchmark West Texas Intermediate (WTI) barrel changes hands at $89.35 at the time of writing, with investors betting on a new round of peace talks between the US and Iran.
US President Donald Trump boosted optimism on Wednesday, confirming ongoing and “productive” negotiations with Tehran that might lead to the resumption of the peace talks over the next few days.
Apart from that, Israel’s cabinet security member, Galia Gamliel, affirmed on Israeli Army Radio that Prime Minister Benjamin Netanyahu will meet the Lebanese President Joseph Aoun later on Thursday. Any progress on a deal between these countries would contribute to setting the conditions for a durable peace between the US and Iran.
Meanwhile, the US blockade of the Strait of Hormuz continues, keeping Crude prices from retreating further. The US military affirmed that they have completely cut off Iran’s sea trade, adding pressure on Tehran to seal a peace agreement, while Islamic Republic officials have threatened to shut the Red Sea if the US continues blocking Iranian ports.
Also on Wednesday, data released by the US Energy Information Administration (EIA) revealed that US Crude Oil stocks decreased by 0.913 million barrels last week, against market expectations of a 0.2 million increase, and following a 3.081 million buildup in the previous week. These figures have taken a back seat with the main focus on Iran, but anyway, the decline in US Crude stockpiles is always a tailwind for Oil prices.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
ING’s commodities team says Copper has climbed to around a one‑month high alongside broader industrial metals as markets price reduced macro risks and potential US–Iran talks. They stress that Copper remains headline‑driven, with conflict escalation and energy spikes as key downside risks, while a de‑escalation scenario could see Copper outperform on rate‑cut expectations, a weaker Dollar and better risk appetite.
Headline‑driven rally with clear scenarios
"Copper rose to around a one‑month high this week, with broader gains across industrial metals as markets priced in easing macro risks."
"However, the market remains highly headline‑driven. Any escalation in the conflict, renewed spikes in energy prices or signs of softer demand could quickly reverse sentiment."
"In a de‑escalation scenario, copper would likely outperform, supported by expectations of eventual rate cuts, a weaker dollar and a broader improvement in risk appetite."
"Downstream supply risks are also gaining attention. Sulfuric acid is emerging as a bottleneck for SX‑EW copper output, with around half of seaborne sulfur transiting the Strait of Hormuz."
"China’s sulfuric acid prices have risen around 90% since the start of the Iran war. Export bans introduced following the Hormuz shipping halt are raising disruption risks to acid-dependent supply in Chile, Peru and the Democratic Republic of the Congo."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Silver prices (XAG/USD) rose on Thursday, according to FXStreet data. Silver trades at $79.65 per troy ounce, up 0.83% from the $78.99 it cost on Wednesday.
Silver prices have increased by 12.05% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 79.65 |
1 Gram | 2.56 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 60.43 on Thursday, down from 60.65 on Wednesday.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
(An automation tool was used in creating this post.)
Standard Chartered’s Steve Englander and Dan Pan argue that United States (US) labour market strength may be overstated once model-based adjustments are stripped out. They estimate that around 35k monthly Nonfarm Payrolls (NFP) jobs are needed to keep the unemployment rate flat, but suggest true jobs growth could be near zero when a more realistic view of firm births and deaths is applied.
Standard Chartered challenges NFP signal
"We estimate that it takes about 35k non-farm payroll (NFP) jobs per month to keep the unemployment rate stable. However, published NFP consists of jobs gains from firms in continuous operations which comes from the Bureau of Labor Statistics (BLS) monthly sample, and an estimated birth-death adjustment (B-D) derived from a model that remains questionable."
"The B-D remains unrealistically stable and high at around 75k on our seasonally adjusted basis. Excluding B-D, equilibrium private NFP growth among firms in continuous operation appears to be -35k, very unusual for a normal growth period, but similar to early 2025 and late 2024."
"Business Employment Dynamics data suggest that monthly jobs created by new firms less those lost from closing firms might be closer to 35k rather than the B-D’s 75k, so published NFP growth of 35k might correspond to actual jobs gains that are flat."
"We prefer the Business Employment Dynamics estimate of jobs created by newly opened firms because it is the only series designed to distinguish between new, closing and continuing firm job dynamics."
"Our first recommendation is that BLS separately publish the seasonally adjusted sample-based estimate of jobs creation by continuing firms. That is the only sample-based employment estimate captured by the payroll survey."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
According to a statement from a senior Iranian official, Pakistani army chief Field Marshal Asim Munir’s trip to Iran has helped reduce differences in some areas; however, issues regarding Tehran’s nuclear ambitions and uranium enrichment remain unsolved.
Additional remarks
After the trip, there are greater hopes for extending the ceasefire and holding a second round of talks.
Fundamental disagreements remain over nuclear issues.
The fate of Iran’s highly enriched uranium and the duration of its nuclear restrictions remain unresolved.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
TD Securities’ Global Strategy Team notes that US rates moved higher as the S&P 500 reached a record high, with comments from Treasury Secretary Bessent acknowledging eventual Federal Reserve rate cuts but allowing for a pause. The report points to upcoming jobless claims, industrial production and Fed speeches as key near-term drivers for Dollar and Treasury market sentiment.
Higher yields with focus on data and Fed
"Rates moved higher on Wednesday while the S&P 500 hit its all-time high. Treasury Secretary Bessent said that eventually the Fed will cut rates, but understands if the Fed needs to wait before lowering rates again. Bessent also said that they won't renew Iranian and Russian oil waivers."
"Treasury released data for international capital flows for February, which showed that foreigners increased their Treasury holdings by $197.7bn."
"On Thursday, jobless claims and industrial production data will be released. Fed's Miran and Williams will speak in the morning with Williams providing a keynote address and a Q&A. Markets will continue to focus on news coming from the Middle East as we head towards the weekend."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- US Dollar Index gains support as Strait of Hormuz uncertainty persists under a dual blockade.
- The Greenback may weaken further as safe-haven demand fades amid rising expectations of de-escalation in the Middle East conflict.
- Fed’s Hammack highlighted the issue of how high energy prices rise and how long they remain elevated.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, halts its losing streak that began on April 6 and is trading around 98.20 during the European hours on Thursday.
The US Dollar (USD) receives some support as traders view the situation around the Strait of Hormuz as highly uncertain, with the waterway effectively restricted under a dual blockade. However, Tehran may allow vessels to transit via the Omani side if an agreement is reached to prevent renewed escalation in hostilities.
The Greenback may further depreciate on faded safe-haven demand amid growing expectations of a potential de-escalation in the Middle East conflict. US President Donald Trump stated that the war was “close to over.” A Bloomberg report highlighted speculation about a possible two-week extension of a ceasefire, although Trump downplayed the need for such a measure, pointing to ongoing negotiations aimed at ending the conflict.
Moreover, easing energy prices helped alleviate inflation concerns and reduced expectations of additional Federal Reserve (Fed) tightening. The Fed is broadly expected to keep interest rates unchanged this month and potentially through the remainder of the year.
Cleveland Fed President Beth Hammack said in a CNBC interview on Wednesday that the key issue to watch is how high energy prices climb and, more importantly, how long they stay elevated. Meanwhile, St. Louis Fed President Alberto Musalem noted that the oil shock driven by the Middle East conflict is likely feeding into core inflation, with expectations that it will remain close to 3% throughout the year.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Forex Market News
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