Forex News

Commerzbank’s Bernd Weidensteiner notes that United States (US) employment rose by 115,000 in April, beating expectations and signaling a recovery after prior weakness. The six‑month average of job gains is picking up again, supported by strong corporate profits and favorable financing conditions. He expects the US economy to weather the global energy crisis relatively well as hiring and wages firm.

Jobs and wages point to resilience

"Employment rose by 115,000 in April. This was significantly higher than expected (consensus +65,000, Commerzbank forecast +50,000), even though revisions show that employment in February and March combined is 16,000 lower than previously reported."

"After employment figures had alternated between increases and decreases over the past eleven months, a decline in jobs would actually have been expected in April. However, we had already noted beforehand that there were some signs that the labor market was improving."

"Furthermore, according to the Atlanta Fed’s median wage tracker, wages rose at a slightly faster pace again, suggesting a tighter labor market. And finally, according to the Conference Board’s survey, consumers are once again viewing the labor market in a slightly more positive light."

"At the same time, corporate profits rose sharply in the first quarter, which typically leads to strong investment and new hiring. As a result, the U.S. economy should weather the global energy crisis relatively well."

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

• UK investors show renewed interest in Gold ETFs, with more than $2 billion in inflows in April
• Stable Gold prices, a less-than-expected hawkish BoE, and falling equity prices likely drove increased interest in Gold ETFs.
• Rising ETF demand tends to support spot prices, which have been hovering between $4,400 and $4,900 since late March.

Inflows returned to global Gold ETFs in April, with funds from the United Kingdom (UK) leading the surge, as the price of the precious metal stabilized after March’s sharp decline.   

Global physically backed Gold ETFs recorded inflows of $6.6 billion in April, according to data from the World Gold Council (WGC). This represents a sharp rebound from March, when ETFs registered a significant sell-off. Positive flows via ETFs are a bellwether for spot prices as investor demand via ETFs tends to directly impact the physical market.

By country, the UK registered inflows of more than $2.1 billion, followed by the United States ($845 million) and Hong Kong ($732 million), the WGC report shows. In overall Europe, funds saw a large inflow of $3.7 billion in April, flipping their year-to-date total from negative to positive.

Positive flows in the UK, and broadly in Europe, appeared linked to heightened geopolitical and geoeconomic risks, as investors assessed the inflationary implications of a more protracted Iran conflict and the associated pressure on energy prices, the WGC report said. 

“With local equities retreating and the Bank of England (BoE) less hawkish than expected, investor interest in Gold likely strengthened as prices recovered and stabilised,” it added.

Gold prices have traded broadly rangebound since the end of March, within a band of between $4,400 and $4,900. While geopolitics keeps the precious’ metal safe-haven appeal intact, the quick hawkish repricing of global central banks’ rate outlook is also capping gains. 

April’s ETF rebound shows that Gold has somewhat regained its safe-haven appeal. While investor demand through ETFs could keep providing a solid floor for the precious metal, any significant gains would need a decline in energy prices and messages from central banks that the current plans to keep interest rates at high levels are no longer on the table. 

ING’s Frantisek Taborsky reports that the Czech National Bank and National Bank of Poland kept rates unchanged but signalled different risk balances. He sees limited scope for further tightening in Czech Republic and a prolonged hold in Poland with conditional tightening risks. Without a clear hawkish catalyst, he expects CEE currencies to stay broadly range‑bound near current levels.

CNB dovish, NBP more cautious

"The Czech National Bank and the National Bank of Poland both left policy rates unchanged (3.50% and 3.75%, respectively), in line with expectations, but signalled diverging risks through their communication. In the Czech Republic, Governor Ales Michl struck a relatively dovish tone, emphasising a wait-and-see approach and arguing that policy is already sufficiently tight, with the Board willing to look through near-term supply-driven inflation pressures."

"By contrast, in Poland, President Adam Glapiński highlighted rising upside risks, pointing to the phase-out of energy subsidies and returning food VAT as potential drivers of renewed inflation pressure in the second half of the year."

"Across the region, recent FX stabilisation has been supported by improved global sentiment, but without a clear hawkish catalyst, further appreciation looks constrained, leaving currencies broadly range-bound near current levels."

"From a market perspective, the contrast suggests limited scope for further tightening in the Czech Republic despite still-elevated rate expectations and waiting longer before a possible hike decision, while in Poland the discussion has shifted away from easing toward a prolonged hold, with tightening risks conditional on inflation persistence."

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

TD Securities strategists Robert Both and Emma Lawrence note that weaker Canadian employment in April, including job losses and a higher unemployment rate, is unlikely to bring the Bank of Canada (BoC) closer to rate cuts. Instead, they argue the data should temper market expectations for BoC hikes in late 2026.

Weaker jobs seen tempering hike pricing

"The April jobs report surprised to the downside with 18k jobs lost (market: +10k, TD: +5k) as the unemployment rate rose by 0.2pp to 6.9%. Details were broadly dovish, with full-time workers leading the pullback alongside a mild pullback in hours worked and softer wage growth."

"Even though today's report was notably dovish, we don't think it moves the Bank of Canada any closer to cuts despite the two-sided guidance at their last meeting, but it should help to push back against market pricing for BoC hikes over the second half of 2026."

"Downside surprise in CAD employment sparked a strong rally across the curve, with rates in the front-end down 8 bps and CAN-US 10s below -90 for the first time since November. We wouldn't get too excited given the well- known volatility of the LFS series and take this report more as a reflection of hike speculation being misplaced. Continue to be long 2s, and long duration as we head into the extension."

"Still, the combination of softer data, the lower inflation backdrop, and higher oil prices will keep the BoC on hold for 2026. However, it will take a few strong downside prints for market pricing to converge with that view."

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

Scotiabank strategists Shaun Osborne and Eric Theoret report the Euro (EUR) is modestly higher versus the Dollar, supported by risk sentiment around the US/Iran conflict despite softer German trade data and slightly reduced ECB tightening expectations. Short-term technicals are described as bullish, with EUR/USD above key Fibonacci levels and rising RSI, opening scope for a move back toward the January high above 1.20.

Bullish structure targets January highs

"The EUR is up 0.4% vs. the USD, a mid-performer among the G10 currencies as it continues to be driven by – and recently buoyed by – broader market sentiment as it relates to the US/Iran conflict. Yield spreads have pulled back, reflecting a slight moderation in expectations for ECB tightening with June now priced at 19bpts – down about 10bpts from the hawkish peak that followed the April 30 policy meeting."

"Risk reversals are confirming the support from sentiment, as the options market continues to fade its modest premium for protection against EUR weakness with scope for continued support as premiums shift toward upside protection (as observed in late 2025/early 2026)."

"Fundamental releases have been limited to weaker German trade data, reflecting a surge in (energy) imports in March, and the EUR appears to be ignoring the prospect of renewed trade tensions following President Trump’s latest threats of tariff hikes by July 4."

"Bullish – the EUR’s recent gains are important, as we look to key technical levels drawn from the Jan-March pullback. The latest recovery has followed a test of critical support in the mid/upper-1.16s around the 38.2% Fibo retracement of the Jan/Mar decline, and tentative gains have pushed above the midpoint (1.1746) toward the 61.8% Fibo at 1.1825."

"The RSI is bullish, in the upper 50s, and we see an increasing likelihood of a full retracement and a push back to the January high above 1.20. We look to a near-term range bound between 1.1720 and 1.1820."

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

• Explosions are reported near the Strait of Hormuz in southern Iran.
• Fox News reports that the US military struck several tankers accused of trying to break a blockade.
• Markets are now monitoring the risk of a broader military escalation in the region.

Geopolitical tensions intensified on Friday after reports from the US and Iranian media regarding military operations around the Strait of Hormuz. According to a Fox News reporter on X, the US military carried out new airstrikes targeting several empty tankers attempting to break a blockade in the region.

At the same time, Iran’s Mehr news agency reported that an explosion was heard in the port city of Sirik, located near the Strait of Hormuz, although no official explanation has been provided so far.

Investors remain focused on potential official statements from Washington or Tehran to assess the risk of a wider escalation in the region.

Market reaction

West Texas Intermediate (WTI) Crude Oil remains under pressure, falling 2.83% on Friday, trading at $91.90 at the time of writing.

Commerzbank’s Barbara Lambrecht reports that China’s central bank (PBoC) used a temporary Gold price dip in April to extend its buying streak to 18 months, with the largest addition since December 2024. Central banks and public institutions bought nearly 245 tons in Q1, slightly above the five‑year average, with Poland and Uzbekistan leading purchases.

Persistent official sector accumulation trend

"China's central bank took advantage of the temporary dip in gold prices and increased its reserves in April for the 18th consecutive month. At 8.1 tons, these were the largest purchases since December 2024."

"Central bank purchases have been among the key drivers of gold demand for over four years. Despite the significant rise in prices, purchases by central banks and other public institutions in the first quarter totaled nearly 245 tons, according to the WGC, which was 3% higher than the previous year and even slightly above the five-year average."

"The Polish and Uzbek central banks were the biggest buyers (31 tons and 25 tons, respectively); only 7 tons were attributable to China’s central bank during this period. That figure is likely to rise this quarter."

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