Forex News
- USD/JPY trades near the 159.20 area as steady US inflation data reinforces expectations that the Fed may keep interest rates higher for longer.
- US Core PCE held at 3.3% YoY in April, highlighting persistent inflation pressure and supporting the US Dollar.
- The Japanese Yen remains under pressure as Tokyo Core CPI slowed to 1.4% YoY in May.
The USD/JPY pair trades in a muted fashion toward the 159.20 region on Friday as the United States Dollar (USD) finds support following the latest inflation data, while the Japanese Yen (JPY) remains pressured amid uncertainty surrounding the Bank of Japan’s (BoJ) policy outlook.
The latest Core Personal Consumption Expenditures (PCE) Price Index held steady at 3.3% YoY in April, reinforcing concerns that inflation remains elevated and supporting expectations that the Federal Reserve (Fed) could maintain a restrictive monetary policy stance for longer.
Meanwhile, the Japanese Yen has been weighed down by recent domestic data. Tokyo Core Consumer Price Index (CPI) inflation slowed to 1.4% YoY in May, remaining below the BoJ’s 2% target for a fourth consecutive month, while factory output unexpectedly rebounded in April.
Additional caution emerged after BoJ Governor Kazuo Ueda warned earlier this week that temporary energy shocks could become more persistent if they begin influencing wages and inflation expectations.
Short-term technical analysis:
On the 4-hour chart, USD/JPY trades at 159.24, holding in a neutral stance as it fluctuates between clustered support just below spot and layered resistance overhead. The pair trades above the 100-period Simple Moving Average (SMA) at 158.48, which underpins the broader uptrend, but remains capped by the 20-period SMA at 159.36, aligning with a horizontal barrier at the same level. The Relative Strength Index (RSI) hovers around 49, hinting at balanced momentum after the recent consolidation, with neither buyers nor sellers in firm control near current levels.
On the topside, immediate resistance appears at 159.25, followed by the tighter confluence around 159.36 where the 20-period SMA and a horizontal level converge, forming a key cap that bulls would need to reclaim to revive upside traction. On the downside, initial support emerges at 159.20, ahead of 159.10, while the 100-period SMA near 158.48 offers a deeper floor; a sustained break below this moving average would likely expose the pair to a more pronounced corrective phase.
(The technical analysis of this story was written with the help of an AI tool.)
- The Dow tagged a fresh record near 51,050 on Friday as Trump teased imminent sign-off on the Iran framework.
- The terms Trump laid out in his Truth Social post differ sharply from what Iranian state media say is in the MOU.
- Iran's state TV this morning reiterated it still controls Hormuz transit, contradicting Trump's "unrestricted" framing.
The Dow Jones Industrial Average (DJIA) punched out a fresh intraday record near 51,050 with the bid traceable to a Truth Social post in which President Donald Trump declared he would be in the Situation Room making a "final determination" on the US-Iran agreement and laid out terms that sounded suspiciously like a finished deal. The catch, and it is becoming a daily ritual, is that the terms Trump described are not the terms Iran has agreed to. Markets have decided to trust the salesman over the contract.
Two deals, one headline
Read Trump's post and you get a clean, victorious framework: Iran "must agree" never to have a nuclear weapon, the Strait of Hormuz "must be immediately open, no tolls, for unrestricted shipping traffic, in both directions," any remaining mines will be "terminated," the US naval blockade "will now be lifted," and roughly 900 pounds of highly-enriched uranium will be "DESTROYED." Read the actual draft memorandum of understanding (MOU) as reported through US officials and you get something far softer: a 60-day extension of the ceasefire, a synchronized and gradual reopening of Hormuz over that window, the blockade rolled back in steps rather than scrapped in one go, and 60 days of negotiation about how to dispose of the uranium stockpile, not its immediate destruction. The former US ambassador to Israel even pointed out publicly that the deal Trump described in his post is not the deal on the table; the MOU simply opens the negotiating window.
Iranian state media is making the same point with less diplomacy. Outlets close to the Revolutionary Guard have called Trump's "fully reopened" framing inconsistent with the latest exchanged text, with one agency reporting the strait will not return to pre-war status under the agreement. This morning, Iran's state broadcaster doubled down: 24 ships had transited Hormuz over the prior 24 hours, but only with Iran's permission, only along "designated routes, at specified times, and under permits and conditions set by Iran." Vessels entering without authorization, the report warned, would face "a strong response." That is not "no tolls, unrestricted, both directions." That is Tehran restating the status quo while Washington's president describes a status quo that does not exist. Iran's Supreme Leader, meanwhile, has not given final approval, and Israeli officials reportedly do not believe he has signed off on the MOU either.
The actions still don't match the words
For a ceasefire about to be formalized, the shooting is awfully active. Iran's Revolutionary Guard launched a ballistic missile at Kuwait late Wednesday, intercepted by air defenses, and the Islamic Revolutionary Guard Corps (IRGC) said Thursday it had struck the US airbase from which the Bandar Abbas strikes originated. The Treasury, on the same day the MOU was supposedly being finalized, threatened sanctions on Oman for any role in a Hormuz tolling scheme. Diplomatically, this is the stretch of a negotiation where small things blow up large; markets are pricing it as if both sides are already at the lectern with pens out.
The data the bid keeps ignoring
The macro backdrop is not doing the bulls any favors either. Yesterday's core Personal Consumption Expenditures Price Index (PCE) climbed to 3.3% YoY, a multi-year high, with headline at 3.8% YoY, and this morning the Chicago Purchasing Managers Index (PMI) exploded to 62.7 against a 50.6 consensus, a four-year high and the largest monthly jump since 2020. Hot manufacturing on top of sticky inflation is not a Federal Reserve (Fed) cutting profile; it is closer to a Fed staying on hold into late 2026 with some Federal Open Market Committee (FOMC) members still floating hikes. Equities are simultaneously pricing a peace dividend the negotiators have not signed and a dovish Fed that neither the data nor the policy guidance support. Both bets can be wrong at the same time.
Trading the breakout
The trend remains up, and the technical picture is clean. The overnight push took out the 51,000 record zone called out as resistance yesterday, printed close to 51,050, then pulled straight back to test the breakout from above. That is textbook bull behavior so long as 51,000 holds; lose it and the breakout becomes a failure pattern. The daily 50-period Exponential Moving Average (EMA) sits near 49,250 and the 200 EMA close to 47,550, miles below, so the broader uptrend is in no danger. Momentum, though, is fading on the short timeframe: the 5-minute Stochastic Relative Strength Index (Stoch RSI) has rolled over from above 80 toward 60, signaling the rally is running on fumes after the overnight breakout.
The framework writes itself. First support is the 51,000 breakout retest; lose it and 50,500 (yesterday's defended level) becomes the magnet, with 50,000 the deeper psychological floor and the 50 EMA the trend line of last resort. Resistance above is open air toward the next round figure near 51,500. The catalyst risk is entirely political. A genuine Trump signature with Iranian ratification extends the breakout; Iranian state media surfacing a meaningful rejection, or a fresh missile incident, hands the tape back to the bears in a hurry. The calendar offers no cover, the rest of the day thins to a parade of Fed speakers (Schmid, Bowman, Paulson, Daly), none of them red-band. Lean with the trend, keep stops tight under 51,000, and treat every Truth Social notification as a potential market event, because right now that is exactly what they are.
Dow Jones 5-minute chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- Silver trades flat despite broad US Dollar weakness and improving sentiment around a potential US-Iran deal.
- Uncertainty over a proposed US-Iran agreement keeps traders from placing aggressive bets.
- XAG/USD consolidates near the 50-day SMA as momentum indicators continue to show mixed signals.
Silver (XAG/USD) trades flat on Friday, failing to capitalize on improving market sentiment surrounding a potential US-Iran peace deal, even as the US Dollar (USD) slides to a two-week low. At the time of writing, XAG/USD trades around $75.60 and is on track to end the week virtually unchanged.
US President Donald Trump said on Friday that the naval blockade on Iranian ports would be lifted. Traders are now awaiting final approval on a reported 60-day memorandum of understanding (MOU) that would extend the current ceasefire and reopen the Strait of Hormuz.
In reaction, the Greenback gave up earlier gains. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around the 98.80 mark after hitting a seven-week high of 99.54 on Thursday.
However, uncertainty around the deal remains high. Iran’s Fars News Agency rejected Trump’s latest comments on a possible deal and said no final decision has been made yet. The report also said the proposed agreement is still in the final stages of ratification in Iran.
The subdued price action in Silver contrasts with Gold, which climbed more than 1.5% on Friday. Traders are avoiding aggressive bets while waiting for more clarity on whether a deal can be reached soon.
Technical Analysis:
On the daily chart, XAG/USD holds below the short-term trend marker as the near-term tone turns mildly bullish. The 50-day simple moving average (SMA) at $75.85 is acting as immediate resistance just overhead, while the 100-day SMA at $81.32 marks a higher cap that reinforces the idea of a market consolidating underneath its medium-term slope.
Momentum studies are soft with the Relative Strength Index (RSI) hovering near 47 and Moving Average Convergence Divergence (MACD) readings below the zero line, which together hint at limited bullish pressure.
On the topside, a daily close above the 50-day SMA at $75.84 would be the first signal that buyers are attempting to regain control, exposing the 100-day SMA at $81.32 as the next notable barrier.
On the downside, the broader bullish structure remains intact while price holds well above the 200-day SMA at $66.94, which offers a key layer of underlying support and a potential zone where medium-term dip buyers could emerge.
(The technical analysis of this story was written with the help of an AI tool.)
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.
According to Fars news agency, the US and Iran are in the final stages of an agreement, though a final decision hasn’t been made. Fars reported on Friday that “Informed sources have rejected Trump’s new claims about a possible deal with Iran, describing his remarks as a mixture of truth and lies and an attempt to portray a fake victory.”
Regarding the agreement, Iran stressed that “after the US blockade is lifted, it will reopen the Strait of Hormuz according to its own pre-determined arrangements.” Tehran denied Trump’s claim that it's obliged to open the Strait without charging fees, saying there’s no such clause in the agreement.
Iran’s arrangements to open the Strait of Hormuz include monitoring and inspecting ships, providing services, and implementing security measures. The deal also includes the immediate payment of $12 billion from Iran’s frozen targets, and no provision for destroying Tehran’s nuclear materials.
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.
- Trump’s post on Iran fuels optimism over Hormuz reopening terms.
- Oil slides toward $87, dragging the Greenback lower.
- Fed officials warn war-driven inflation could tighten policy.
The EUR/USD pair edges up by 0.12% on Friday as the US Dollar (USD) drops amid hostilities in the Middle East, while a US-Iran deal is reportedly pending approval by the White House and senior Iranian officials. At the time of writing, EUR/USD trades at 1.1664.
EUR/USD gains as Hormuz reopening hopes pressure US Dollar and crude
Sentiment remains positive amid a post in social media by US President Donald Trump, who said that Iran must agree that it will never have a nuclear weapon or bomb, adding that the Strait of Hormuz must be open immediately and that water mines would be terminated by Iran. Regarding the enriched uranium, Trump said “It will be unearthed by the United States (which, it is agreed, is the only Country, along with China, with the mechanical capability of doing so!), in close coordination and conjunction with the Islamic Republic of Iran, plus the International Atomic Energy Agency, and DESTROYED.”
In the headline, Oil prices tumbled by 1.50% with West Texas Intermediate (WTI) extending its losses toward $87.20, while the US Dollar Index (DXY) is down 0.17%. The DXY, which measures the buck’s value against six currencies, sits at 98.81, a tailwind for the shared currency.
The US economic schedule featured the Chicago PMI, which expanded by 62.7, exceeding estimates of 50.5.
Aside from data releases, Federal Reserve (Fed) Governor Michelle Bowman commented that the disinflation process has stalled, and that she would consider a shift in the policy outlook if war-driven inflation broadens.
Philadelphia Fed President Anna Paulson said inflationary pressures are weighing on the economy, making it tough for firms to plan for the future. Earlier, Kansas City Fed Jeffrey Schmid said the US central bank needs to weigh how to tighten monetary policy, warning against treating the Oil shock as transitory.
Across the pond, German inflation eased in May from 2.9% to 2.7% YoY, according to the Harmonized Index of Consumer Prices. Core figures rose from 2.3% in April to 2.5% YoY.
Next week, the US and Eurozone economic schedules will feature Flash PMIs across Europe, while in the US, the ISM Manufacturing PMI is expected to deteriorate modestly in the May reading.
EUR/USD Price Forecast: Technical outlook
In the daily chart, EUR/USD trades at 1.1679. The pair holds a constructive near‑term bias as it trades above the cluster of simple moving averages (50, 100 and 200) grouped around 1.1666 and remains supported by the rising trend line break area near 1.1582. The Relative Strength Index (14) at 51.5 is close to neutral but tilts slightly to the upside, suggesting modest bullish momentum while price consolidates above its underlying trend support.
On the topside, initial resistance is located at the descending trend line break level around 1.1809, where prior rallies have struggled. On the downside, immediate support is seen at the latest close region around 1.1679, followed by the simple moving average cluster near 1.1666, with the former trend line break at 1.1582 providing a deeper cushion ahead of the more distant structural floor near 1.1245.
(The technical analysis of this story was written with the help of an AI tool.)
Euro Price This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.32% | -0.15% | 0.24% | -0.19% | -0.43% | -1.86% | -0.36% | |
| EUR | 0.32% | 0.20% | 0.60% | 0.14% | -0.15% | -1.56% | -0.05% | |
| GBP | 0.15% | -0.20% | 0.15% | -0.07% | -0.35% | -1.75% | -0.21% | |
| JPY | -0.24% | -0.60% | -0.15% | -0.45% | -0.71% | -2.12% | -0.62% | |
| CAD | 0.19% | -0.14% | 0.07% | 0.45% | -0.27% | -1.69% | -0.14% | |
| AUD | 0.43% | 0.15% | 0.35% | 0.71% | 0.27% | -1.40% | 0.09% | |
| NZD | 1.86% | 1.56% | 1.75% | 2.12% | 1.69% | 1.40% | 1.56% | |
| CHF | 0.36% | 0.05% | 0.21% | 0.62% | 0.14% | -0.09% | -1.56% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
- Gold rebounds from a two-month low but remains on track for a third straight monthly decline.
- Markets assess a proposed US-Iran agreement that would reopen the Strait of Hormuz and extend the ceasefire.
- XAU/USD consolidates after its recent rebound, with momentum indicators showing mixed signals.
Gold (XAU/USD) extends its rebound on Friday as traders assess the prospects of a potential US-Iran deal. At the time of writing, XAU/USD trades around $4,583 after recovering from a two-month low of $4,366 touched on Thursday.
Risk sentiment improved after US President Donald Trump said on Friday that “the naval blockade will now be lifted” and added that he would be meeting in the Situation Room “to make a final determination” on Iran. This comes after Axios reported on Thursday that the US and Iran reached a 60-day memorandum of understanding (MOU).
The deal would extend the current ceasefire and reopen the Strait of Hormuz. During this period, both sides would continue talks on Iran's nuclear program. Iran's Tasnim news agency reported that the deal is not finalized or confirmed.
Oil prices turned lower following the latest developments, with West Texas Intermediate (WTI) trading around $85 per barrel and heading for its first monthly decline in five months. Still, crude prices remain well above pre-war levels, keeping inflation concerns in focus.
US Treasury Secretary Scott Bessent said on Thursday that Trump has three conditions for any agreement. Iran must reopen the Strait of Hormuz, hand over its enriched uranium and fully end its nuclear program.
However, improving sentiment is weighing on the US Dollar. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, slips below its two-week-old range and trades around 98.80 at the time of writing after touching a seven-week high of 99.54 on Thursday.
Still, Gold’s upside could remain limited as hawkish signals from the Federal Reserve (Fed) linked to elevated Oil prices continue to act as a headwind. The precious metal is on course for a third monthly drop.
The latest US Personal Consumption Expenditure (PCE) inflation data also reinforced expectations that the Fed could keep interest rates higher for longer as inflation pushes further away from the central bank’s 2% target.
Kansas City Fed President Jeff Schmid said on Friday that policymakers “may need to weigh how to make monetary policy more restrictive” and stressed that the Fed “must signal commitment to lowering inflation.”
Philadelphia Fed President Anna Paulson said that “inflation is too high, and was too high even before the war started.” Paulson added that “holding rates steady gives Fed space to weigh data” and said monetary policy is “well positioned.”
Looking ahead, the US economic calendar remains relatively light on Friday, leaving Gold at the mercy of Fed commentary and headlines surrounding US-Iran talks.
Technical Analysis: XAU/USD rebounds from two-month low
XAU/USD sits just under the 20-day Bollinger simple moving average around $4,587.97, leaving the near-term tone broadly neutral and slightly capped by that mid-line, while the lower band near $4,414.50 offers a distant volatility floor.
The Relative Strength Index (RSI) hovers around 48, hinting at balanced momentum, and the Average Directional Index (ADX) near 24 suggests a relatively weak underlying trend as price consolidates in the upper half of the recent Bollinger envelope.
On the topside, initial resistance is defined by the 20-day Bollinger simple moving average at roughly $4,588, with the upper Bollinger band next at about $4,761 acting as a wider bullish extension barrier.
On the downside, immediate demand is expected ahead of the lower Bollinger band around $4,415, where a break would open the door to a deeper corrective phase within the broader range-bound structure.
(The technical analysis of this story was written with the help of an AI tool.)
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
- USD/CAD reverses intraday gains as improving sentiment surrounding a potential US-Iran deal weighs on the US Dollar.
- Traders are awaiting final approval from Trump on a proposed 60-day memorandum of understanding (MOU).
- Canada Q1 GDP contracts 0.1%, marking a second consecutive quarter of negative growth.
USD/CAD reverses its intraday gains on Friday as a softer US Dollar (USD) helps the Canadian Dollar (CAD) recover from weakness driven by softer-than-expected Gross Domestic Product (GDP) figures. At the time of writing, the pair trades around 1.3780 after rising to 1.3829 earlier in the American session.
On the geopolitical front, hopes for a potential US-Iran deal are reducing safe-haven demand for the US Dollar. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trims earlier gains on Friday and slips below the 99.00 mark.
Traders are awaiting final approval from US President Donald Trump on a proposed 60-day memorandum of understanding (MOU). The agreement would extend the current ceasefire and reopen the Strait of Hormuz.
Trump said on Friday that “the naval blockade will now be lifted” and added that he would be meeting in the Situation Room “to make a final determination” on Iran.
However, Iran has not yet confirmed or finalized the agreement, keeping some uncertainty in markets. Tehran also continues to say that shipping through the Strait of Hormuz is under its control, while the US insists the waterway must remain unrestricted.
On the data front, Canada’s economy contracted in the first quarter of the year on an annualized basis, marking the second consecutive quarterly decline. Statistics Canada reported that GDP contracted 0.1% in Q1, missing expectations for 1.5% growth. Two straight quarters of economic contraction is commonly seen as a technical recession.
On a monthly basis, GDP declined 0.1% in March after expanding 0.2% in February, missing market expectations for a flat reading.
Separately, The Wall Street Journal reported that the Trump administration is expected to propose changes to the US-Mexico-Canada Agreement (USMCA) that would require half of a vehicle’s components to be made in the United States.
In a post published on Truth Social on Friday, United States (US) President Donald Trump said that the naval blockade will be lifted and ships caught in the Strait of Hormuz may start the process of "heading home."
"Iran must agree that they will never have a Nuclear Weapon or Bomb. The Hormuz Strait must be immediately open, no tolls, for unrestricted shipping traffic, in both directions," President Trump said and added the enriched material will be "unearthed by the United States, in close coordination and conjunction with the Islamic Republic of Iran, plus the International Atomic Energy Agency."
Trump further stated that no money will be exchanged until further notice and concluded his post by noting that he will be having a meeting in the Situation Room to make a final determination.
Market reaction
With the immediate reaction, the US Dollar (USD) came under renewed selling pressure. At the time of press the USD Index was down 0.15% on the day at 98.83.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.17% | -0.27% | -0.03% | -0.05% | -0.43% | -0.92% | -0.34% | |
| EUR | 0.17% | -0.10% | 0.11% | 0.13% | -0.26% | -0.72% | -0.16% | |
| GBP | 0.27% | 0.10% | 0.19% | 0.22% | -0.15% | -0.62% | -0.09% | |
| JPY | 0.03% | -0.11% | -0.19% | 0.04% | -0.36% | -0.85% | -0.30% | |
| CAD | 0.05% | -0.13% | -0.22% | -0.04% | -0.40% | -0.86% | -0.32% | |
| AUD | 0.43% | 0.26% | 0.15% | 0.36% | 0.40% | -0.47% | 0.08% | |
| NZD | 0.92% | 0.72% | 0.62% | 0.85% | 0.86% | 0.47% | 0.55% | |
| CHF | 0.34% | 0.16% | 0.09% | 0.30% | 0.32% | -0.08% | -0.55% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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