Forex News
In a post published on X on Friday, Iran's top negotiator Mohammad Baqer Qalibaf said they have no trust in guarantees or words, and added: "Only actions are the measures, no action will be taken before the other side acts."
"The winner of any agreement is the one who prepares better for war from the day after," Qalibaf noted and explained that they "seize concessions not through dialogue, but with missiles."
Market reaction
Markets cling to a cautious stance in the early American session on Friday. At the time of press, the US Dollar Index (DXY) was unchanged on the day near 99.00.
DBS Group Research’s Philip Wee notes that Brent and WTI have fallen sharply, as markets anticipate abundant supply from the Gulf. US Treasury Secretary Scott Bessent expects Oil prices to fall below pre-conflict levels, while ongoing negotiations with Iran and the status of the Strait of Hormuz remain key uncertainties for energy markets.
Brent and WTI extend declines
"Crude oil prices continued to decline, falling farther below USD 100 per barrel."
"US Treasury Secretary Scott Bessent expects oil prices to be lower than pre-conflict levels."
"The oil market will be very well supplied, with almost 2,000 ships waiting to come out of the Gulf."
"Even if headline energy prices cool, the secondary damage to global logistics from the months-long closure of Hormuz has started to filter into intermediate goods."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Brown Brothers Harriman’s Elias Haddad notes that resilient US growth and sticky PCE inflation keep the Dollar supported despite improved risk sentiment from progress on a US-Iran deal.
Dollar Index poised for range break
"We are sticking to our view the dollar index (DXY) risk overshooting the upper end of its nearly one year 96.00-100.00 range in the near term. Resilient US economic activity in both absolute and relative terms outweigh the drag to USD from easing geopolitical fears."
"Both headline and core PCE inflation are overshooting the FOMC’s 2026 projection of 2.7%. Moreover, core services less housing PCE printed for a second straight month at 3.5% y/y in April, well above the level consistent with a sustained return to the Fed’s 2.0% target."
"The Atlanta Fed GDPNow model real GDP growth estimate for Q2 cooled but continues to point at above-trend growth. GDPNow suggests the US economy will expand at an annualized rate of 3.8% in Q2, down from 4.3% in its previous release on May 21. In parallel, the May PMI data points to a widening US growth edge over peers."
"Encouraging progress over a US-Iran deal has turbocharged the rally in risk assets. Both sides are reportedly nearing an agreement that would extend the ceasefire by 60 days and reopen the Strait of Hormuz."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The Canadian economy stagnated in the first quarter of 2026.
- USD/CAD trades in positive territory above 1.3800 on Friday.
Canada's Gross Domestic Product (GDP) was unchanged on a quarterly basis in the first quarter of 2026 following the 0.2% contraction recorded in the last quarter of 2025, Statistics Canada reported on Friday.
In this period, the annualized GDP declined by 0.1%, falling short of the market expectation for a growth of 1.5%. On a monthly basis, the GDP contracted by 0.1% in March.
Market reaction
USD/CAD edged higher with the immediate reaction to disappointing GDP data and was last seen rising 0.25% on the day at 1.3820.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
Brown Brothers Harriman reports that USD/JPY is trading directionless above 159.00 after Japan’s Ministry of Finance conducted record-sized FX intervention to cap the pair around 160.00. The bank notes that lower Oil prices may help pull USD/JPY toward 155.00, but a sustained break below that level would require a more hawkish Bank of Japan, which they see as unlikely for now.
Record intervention anchors Yen ceiling
"USD/JPY is directionless above 159.00. Japan's Ministry of Finance purchased a total of ¥11.735 trillion in the period from April 28 through May 27 to stem the surge in USD/JPY."
"That’s the biggest intervention amount on record and underscores authorities’ determination to keep a lid on USD/JPY around 160.00."
"The correction in crude oil prices takes some pressure off JPY and could help nudge USD/JPY lower to 155.00."
"But breaking materially below that level hinges on the Bank of Japan to lean more hawkish. It’s too soon to bet on that because almost all underlying CPI indicators softened in April."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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