Forex News

• Wall Street rises on Thursday as traders bet the US-Iran ceasefire can hold despite early violations.
• The Dow added over 300 points, closing above 48,000 for the first time in over a month.
• Oil prices rebounded above $98 per barrel but retreated after Israel signaled willingness to negotiate with Lebanon.
• February PCE inflation data came in line with expectations, while Q4 GDP growth was revised lower.

The Dow Jones Industrial Average (DJIA) climbed around 300 points on Thursday, or roughly 0.7%, extending a two-day rally that has seen the index recover sharply from its war-era lows. The S&P 500 added 0.6%, and the Nasdaq Composite gained 0.7% as risk appetite held up despite growing doubts about the durability of the two-week ceasefire between the US and Iran.

The index is now trading above 48,000 after bouncing firmly off the 200-day exponential moving average (EMA) near 46,700 and reclaiming the 50-day EMA around 47,550. The Stochastic RSI on the daily chart is pushing above 60, suggesting bullish momentum is building but not yet overextended. Resistance looms near the 48,200 level, which marks Thursday's close and a zone where price has previously stalled.

Lebanon talks lift sentiment late in the session

Markets got a late-session boost after Israeli Prime Minister Benjamin Netanyahu announced he had instructed his cabinet to begin direct negotiations with Lebanon. The talks, which are expected to start next week at the State Department in Washington, will focus on disarming Hezbollah and establishing peaceful relations between the two countries. The announcement followed calls with President Trump and White House envoy Steve Witkoff, who reportedly urged Netanyahu to scale back strikes on Lebanon to support the broader peace process. Iran's parliamentary speaker, Mohammad Bagher Ghalibaf, had earlier warned that continued Israeli strikes on Hezbollah would carry consequences, calling the attacks a violation of the ceasefire agreement. The S&P 500 moved into the green and Oil prices came off their intraday highs following the Netanyahu statement, as traders interpreted the willingness to negotiate as a step toward de-escalation on the Lebanon front, which had been the primary threat to the fragile truce.

Oil rebounds but the direction remains uncertain

West Texas Intermediate (WTI) futures traded above $98 per barrel on Thursday after briefly topping $100 earlier in the session. International Brent crude futures rose around 1% to above $95. The bounce comes after Wednesday's dramatic intraday plunge of over 10% following the ceasefire announcement. The Strait of Hormuz remains functionally closed, with only some dry cargo bulk carriers traversing the waterway since the deal was struck. Around 230 ships loaded with Oil are reportedly waiting to pass through. The head of the UAE's main oil company said vessels must be allowed to navigate the corridor without conditions. Vice President JD Vance is set to lead a US delegation to Islamabad on Saturday for the first round of direct talks with Iran.

PCE in line, GDP revised lower

Thursday's economic calendar was heavy. The Core Personal Consumption Expenditures Price Index (PCE), the Federal Reserve's (Fed) preferred inflation gauge, came in at 0.4% MoM for February, matching consensus and the prior reading. On a YoY basis, core PCE increased 3%, slightly below the previous 3.1% and also in line with expectations. Gross Domestic Product (GDP) growth for Q4 was revised lower to an annualised 0.5%, down from 0.7% previously, suggesting the economy was already losing momentum before the Iran conflict escalated. Initial jobless claims rose to 219K, above the 210K consensus, adding to signs of softening in the labour market. Personal income fell 0.1% MoM, a sharp miss against the 0.3% forecast, though personal spending edged up 0.5%.

Minutes from the Federal Open Market Committee's (FOMC) March meeting, also released this week, revealed that policymakers remain divided. Some members viewed a rate hike as potentially necessary to contain Oil-driven inflation, while others still expected one rate cut this year. The ceasefire has shifted rate expectations meaningfully. At the start of the week, markets had priced out any chance of a cut. Now, futures are beginning to price at least one reduction back into the curve.

Meta jumps on AI model launch

In single-stock action, Meta (META) rose more than 3% on Thursday, extending a 6.5% pop from Wednesday's session. The gains followed the company's launch of Muse Spark, its first major artificial intelligence model developed under the Meta Superintelligence Labs division. The model is proprietary, marking a shift from Meta's previous open-source approach. Defensive names also attracted buying, with Walmart (WMT) and utilities such as Constellation Energy (CEG) trading higher. The broader rally was underpinned by lingering optimism from Wednesday's surge, which saw all three major US indexes jump more than 2%, with the Dow posting its best single-day gain since April 2025.

Looking ahead

Friday's March Consumer Price Index (CPI) report at 12:30 GMT is the week's main event. Consensus expects a 0.9% MoM reading and 3.3% YoY, both sharp increases from February's 0.3% and 2.4%, respectively, reflecting the initial pass-through of elevated energy costs. A hot print could quickly revive rate hike expectations and stall the equity rally, while a softer number would reinforce the narrative that the Fed has room to cut later this year. The preliminary April University of Michigan (UoM) consumer sentiment survey, also due Friday, will offer an early read on how the ceasefire is filtering into household confidence. The index is expected to fall to 52 from 53.3.

Dow Jones daily chart

(This story was corrected on April 9 at 18:36 GMT to say that US core PCE increased 3%, below the previous reading of 3.1%, not that it held at 3%.)

• AUD/USD extends gains for a fourth straight day as a weaker US Dollar supports the pair.
• Cautious mood persists as doubts emerge over the durability of the US-Iran ceasefire.
• Focus shifts to US CPI and upcoming US-Iran talks.

AUD/USD edges higher on Thursday, extending gains for a fourth straight day as hopes of de-escalation following the US–Iran ceasefire keep the US Dollar (USD) on the defensive, lending support to the Australian Dollar (AUD). At the time of writing, AUD/USD is trading around 0.7087, hovering near three-week highs.

The Greenback came under heavy selling pressure on Wednesday after the US and Iran agreed to a two-week ceasefire. The initial optimism around the truce helped ease market stress, but it proved short-lived after Iran said three parts of the agreement had already been violated following Israeli strikes on Lebanon, raising questions over whether the ceasefire will hold.

As a result, the broader mood remains cautious rather than fully risk-on. Against this backdrop, risk-sensitive currencies like the Australian Dollar remain driven by US Dollar dynamics, even as a hawkish Reserve Bank of Australia (RBA) outlook provides underlying support.

Attention now turns to US-Iran talks scheduled for the weekend in Pakistan. According to NBC, citing a US official, President Donald Trump has urged Israel to ease strikes on Lebanon to help ensure the success of negotiations with Iran. Meanwhile, Israeli Prime Minister Benjamin Netanyahu said direct talks with Lebanon will begin soon, focusing on disarming Hezbollah and establishing peace.

Beyond geopolitical developments, the latest US economic data showed mixed signals. Core Personal Consumption Expenditures (PCE) inflation rose by 0.4% MoM in February, in line with expectations, while the annual rate eased to 3% from 3.1%. At the same time, the final Q4 Gross Domestic Product (GDP) growth was revised lower to 0.5% from 0.7%.

Traders now await the US Consumer Price Index (CPI) data due on Friday, with economists expecting headline CPI to rise by 0.9% MoM, up from 0.3% in February, while annual inflation is seen accelerating to 3.3% from 2.4%.

Meanwhile, the Federal Reserve’s (Fed) Minutes from the March meeting, released on Wednesday, highlighted a two-sided view. Most participants said that a prolonged conflict in the Middle East could weaken labor market conditions, which may warrant additional rate cuts. At the same time, many participants flagged the risk of inflation staying elevated for longer, especially if Oil prices continue to rise, which could call for rate hikes.

• PCE inflation confirms persistent price pressure, supporting a “higher-for-longer” Fed stance.
• Strong consumer spending signals economic resilience.
• Falling US yields narrow the rate differential, weighing on USD/JPY early in the American session.

The USD/JPY pair trades firm near the 158.90 handle on April 9, as today’s United States (US) data, particularly the Personal Consumption Expenditures (PCE) report, reinforced the “higher-for-longer” narrative around Federal Reserve (Fed) policy. This is keeping the US Dollar (USD) well supported against the Japanese Yen (JPY).

Fresh data showed that the Fed’s preferred inflation gauge remains stubbornly elevated. Headline PCE rose 0.4% MoM, while core PCE also increased 0.4%, marking a third consecutive strong monthly gain. On an annual basis, core inflation stands at 3.0%, still clearly above the Fed’s 2% target. At the same time, consumer spending jumped 0.5%, highlighting continued demand resilience, although largely driven by higher prices rather than real growth.

On another note, Initial Jobless Claims rose slightly to 219K but remained historically low, signaling a still-solid labor market. Growth concerns still linger, with the US Gross Domestic Product (GDP) revised lower but not enough to shift Fed expectations toward easing

Short-term technical analysis:

On the four-hour chart, USD/JPY trades at 158.95, maintaining a capped tone as it sits below the 20-period simple moving average (SMA) at 159.12 and the 100-period SMA at 159.21. The pair has slipped back under this short-term moving-average cluster, suggesting rallies are being sold, while the Relative Strength Index (RSI) near 47 points to fading bullish momentum rather than outright oversold conditions.

On the topside, initial resistance aligns at 158.96, with further hurdles at 159.10 and the 20-period SMA at 159.12, ahead of the 100-period SMA at 159.21 and a stronger barrier near 159.30. On the downside, immediate support is located at 158.83, where a horizontal level underpins the recent pullback; a sustained break below this floor would open the door to a deeper correction in the near term.

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

• The US Dollar tumbles against the Canadian Dollar this week as a US-Iran ceasefire crushed safe-haven demand.
• The pair slid from 1.3965 to a low near 1.3800, its steepest weekly decline since late January.
• Oil prices whipsawed on ceasefire headlines, with WTI swinging from above $110 to below $100 before rebounding.
• The US Dollar Index fell below 99 for the first time in a month as rate cut expectations returned.

USD/CAD has shed nearly a full percent since the start of the week, sliding from the 1.3965 area to trade near the 1.3800 handle on Thursday. The move accelerated sharply on Tuesday evening after the US and Iran agreed to a Pakistan-brokered two-week ceasefire, pulling the rug out from under the Greenback's wartime safe-haven bid.

A ceasefire nobody expected

The timing was dramatic. With just hours remaining on President Donald Trump's deadline for Iran to reopen the Strait of Hormuz, Pakistan's Prime Minister Shehbaz Sharif announced that both sides had agreed to an immediate ceasefire. Trump confirmed the deal on Truth Social, calling Iran's 10-point proposal a "workable basis on which to negotiate." The announcement sent shockwaves through FX markets, with the Bloomberg Dollar Spot Index dropping as much as 1.1% on Wednesday, its steepest single-day decline since January. The Greenback fell against all 16 major peers as traders rapidly unwound one of the conflict's most crowded trades: long US Dollars.

For USD/CAD specifically, the selloff was amplified by the Oil channel. WTI plunged over 10% intraday as the prospect of Hormuz reopening flooded back into the pricing. While cheaper Oil is typically a headwind for the Canadian Dollar, the broader risk-on impulse and collapsing US Dollar more than offset any commodity drag. The loonie caught a strong bid as funds rotated out of defensive positioning.

The rate expectations reset

Perhaps the most consequential shift this week has been in Federal Reserve (Fed) expectations. Before the ceasefire, markets had priced out any chance of a Fed rate cut, with traders even flirting with the possibility of a hike to combat Oil-driven inflation. That narrative flipped overnight. With Oil back below $100 and the immediate threat of an inflationary spiral receding, rate futures have begun pricing at least one cut back into the 2026 curve. Minutes from the Federal Open Market Committee's (FOMC) March meeting, released Wednesday, showed policymakers were split, with some viewing a hike as potentially necessary while others still expected a cut this year. The ambiguity is keeping the Dollar on the back foot.

On the chart, the damage is clear

The hourly chart tells the story neatly. USD/CAD peaked near 1.3965 last Friday and has been in a near-vertical decline since, breaking below the Parabolic SAR and slicing through the 1.3900 and 1.3850 levels with minimal consolidation. The RSI on the hourly timeframe dipped into oversold territory below 30 earlier this week before staging a modest recovery to the mid-40s, suggesting the initial selling impulse may be losing momentum around the 1.3800 to 1.3850 zone.

But don't call it a bottom yet

Thursday's price action suggests the easy part of the move may be done, but the hard part is just beginning. The ceasefire is already showing cracks. Iran accused the US of violating the deal after Israel continued strikes on Lebanon, while the Strait of Hormuz remains functionally closed. Oil has bounced back above $97, and the DXY has steadied near 99 as risk appetite fades. VP Vance is set to lead a US delegation to Islamabad for talks on Saturday, and traders will be watching closely to see whether the fragile truce holds or collapses.

The data calendar adds another layer of uncertainty. US March Consumer Price Index (CPI) data drops on Friday, offering the first real look at how the conflict has impacted consumer prices. A hot print could quickly revive rate hike fears and snap the Dollar back to life, while a soft number would reinforce the rate cut repricing and potentially push USD/CAD toward the 1.3750 to 1.3700 zone.

For now, the pair is stuck between a ceasefire bid and a fragile peace. The 165-pip drop this week says the market wanted this truce badly. Whether it survives the weekend is another question entirely.

USD/CAD 1-hour chart

• Fragile US-Iran ceasefire and regional attacks kept geopolitical risks in focus.
• US PCE inflation stayed firm, while labor market data remained resilient.
• BoE hike expectations and a softer Dollar help Sterling stay supported.

The GBP/USD pair advances past the 1.3400 figure on Thursday amid deteriorating risk appetite. The Middle East ceasefire seems fragile, as Israel strikes Lebanon amid the conflict with Hezbollah. At the time of writing, the pair trades at 1.3441, up 0.36%.

Pound gains as Mideast tensions persist and Fed bets hold firm

Wall Street trades barely unchanged, while the Greenback shows signs of life, trimming some of its earlier losses according to the US Dollar Index (DXY). The DXY, which measures the buck’s performance against six currencies, is up 0.01% at 99.01, after a 1% decline over the last two days.

Geopolitics continued to drive the markets, with no signs that Iran will open the Strait of Hormuz, as Tehran demands that the ceasefire deal include Lebanon. Meanwhile, Israel intensified its attacks, which had killed more than 250 people, threatening an escalation of the conflict in the region.

US data showed that inflation in February rose by 0.4% MoM, above the prior month’s 0.3%. In the twelve months to February, the Personal Consumption Expenditures (PCE) Price Index expanded 2.8%, as in January. Core figures, which the Federal Reserve (Fed) considers its preferred inflation gauge, were 0.4% MoM for the same period, as expected and unchanged from January, while for the whole year, prices dipped from 3.1% to 3%, as estimated.

Traders' expectations for Fed rate cuts remained unchanged, as shown by money markets, which estimated six basis points of easing towards the end of the year, according to the CME FedWatch Tool.

Jobs data was also solid, even though Initial Jobless Claims for the week ending April 4 jumped from 203K to 219K last week, exceeding the forecasts of 210K. The print was slightly above the 4-week average of jobless claims at 209.5K, but Continuing Claims decreased by 38K to 1.794K, its lowest level since May 2024.

Sterling boosted by BoE rate hike expectations

In the UK, the economic docket remains scarce, yet the British Pound extended its gains amid improved risk appetite and expectations of further rate hikes by the Bank of England. 

Data from Prime Market Terminal (PMT) revealed that markets expect the BoE to hike at the June 18 meeting, with a slim 21% chance of a rate hike on April 30. For the whole year, investors expect 39 basis points of tightening.

BoE interest rate probabilities

Ahead, GBP/USD traders will eye the US Consumer Price Index (CPI) report for March, which is projected to show a substantial increase, mostly in the headline print, rising from 2.4% to 3.3%. Core CPI is expected to rise from 2.5% to 2.7%.

GBP/USD Price Analysis: Technical outlook

In the daily chart, GBP/USD trades at 1.3437. The pair holds just under the latest simple Moving Average Triple reading at 1.3439, leaving price capped by this cluster of medium-term averages and maintaining a mildly bearish bias while it remains below that area. The previously resisted downtrend line, referenced around 1.3137, now sits well beneath the spot and hints that the broader structure still guards the downside even as topside attempts stall under moving-average pressure.

On the topside, immediate resistance is located at the simple Moving Average Triple around 1.3439, and a sustained break above it would be needed to ease the current cap and expose the higher reference area near the former uptrend support line around 1.3785. On the downside, initial support is inferred from the reclaimed downtrend line region near 1.3137, where a break lower would reopen deeper losses within the broader bearish structure.

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

Israeli Prime Minister Benjamin Netanyahu announced Thursday that he has ordered the start of direct negotiations with Lebanon "as soon as possible," with talks expected to center on disarming Hezbollah and establishing a formal peace between the two nations.

The development, first reported by Axios correspondent Barak Ravid on X, marks a notable shift in Israeli posture toward Lebanon. Direct bilateral negotiations between Jerusalem and Beirut would represent a departure from the indirect, mediator-dependent frameworks that have historically defined the relationship.

Hezbollah's disarmament has long been a non-starter for the Iran-backed group, which maintains a significant arsenal and political presence in Lebanon's government. Any negotiation framework that places disarmament at the center will face immediate resistance, not only from Hezbollah itself, but likely from Tehran, which views the group as a cornerstone of its regional influence.

However, the gap between announcing negotiations and achieving real-world results remains cavernous: Lebanon's fractured political system, Hezbollah's dual role as militia and political party, and Iran's interests all complicate the path forward. Whether this becomes a substantive diplomatic process or remains a headline will depend on what both sides are willing to put on the table.

Israeli Prime Minister Benjamin Netanyahu:

In light of Lebanon's repeated requests to open direct negotiations with Israel, I instructed the cabinet yesterday to start direct negotiations with Lebanon as soon as possible. The negotiations will focus on disarming Hezbollah and establishing peaceful relations between Israel and Lebanon.

BNY Strategist Geoff Yu argues that European rate markets still discount too many hikes for the European Central Bank (ECB), Bank of England (BoE) and Swiss National Bank (SNB) despite an improvement in global risk sentiment following the U.S.–Iran ceasefire. He highlights that current futures pricing remains well above levels at the start of the year and sees better risk-reward in pushing out hikes and even reintroducing cuts, particularly for the SNB.

Markets overestimate European tightening path

"Risk sentiment is rallying strongly as the U.S. and Iran reach a temporary ceasefire, but not all asset classes are responding equally. If we characterize improvement in risk sentiment as an easing in financial conditions, then the usual manifestations should be stronger equities, lower yields and a drop in policy rate expectations. As European markets opened, pricing (via December 2026 futures) for the European Central Bank (ECB), Bank of England (BoE) and Swiss National Bank (SNB) reacted as expected, reducing targets for year-end benchmark rates as energy prices dropped sharply."

"However, current pricing remains well above levels at the beginning of the year, including up to 80bp for the BoE and over 50bp for the ECB. Swiss rates are still expected to move above zero by year-end. By all accounts, we believe pricing is far removed from policy objectives."

"The ECB is quite split, with some members warning that the central bank would need to act even before second-round effects came through. Consequently, it is striking that BoE and ECB rate pricing dropped by almost the same amount as ceasefire news filtered through, given how different policy stances are."

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

• Gold prices hold steady as markets assess uncertainty surrounding the fragile US-Iran ceasefire.
• US economic data shows steady inflation but softer growth momentum.
• Technically, XAU/USD trades range-bound between key moving averages, signaling a neutral near-term bias

Gold (XAU/USD) remains range-bound on Thursday as markets closely monitor developments surrounding the fragile ceasefire in the Middle East. At the time of writing, XAU/USD is trading around $4,750 after climbing to a three-week high above $4,800 a day earlier, as doubts over the durability of the US-Iran truce emerge.

Ceasefire doubts rise as Iran flags violations

Iran's Parliament Speaker, Mohammad Bagher Ghalibaf, said that three parts of the ceasefire agreement had already been violated. His comments came after Israeli strikes on Lebanon. Iran says Lebanon is part of the ceasefire, while the US and Israel argue it is not. Tehran has warned it could pull out of the agreement if attacks on Lebanon continue.

Markets now await US-Iran negotiations, with the first round of talks scheduled for Saturday in Pakistan, with the goal of achieving a permanent ceasefire and reopening the Strait of Hormuz. Iran’s President Masoud Pezeshkian warned that attacks on Lebanon would undermine the ceasefire and render negotiations meaningless.

In the meantime, US President Donald Trump posted on Truth Social that US forces would “remain in place, and around, Iran, until such time as the REAL AGREEMENT reached is fully complied with.”

Rising oil and geopolitics complicate Fed rate path

Uncertainty over whether the two-week ceasefire will hold is weighing on market sentiment, with Crude prices rebounding after a sharp pullback, keeping inflation concerns alive and complicating the Federal Reserve’s (Fed) interest rate path.

Meanwhile, the Fed's Minutes from the March meeting, released on Wednesday, highlighted a two-sided view. “Most participants,” said that a prolonged conflict in the Middle East could weaken labor market conditions, which may warrant additional rate cuts. At the same time, “many participants” flagged the risk of inflation staying elevated for longer, especially if Oil prices continue to rise, which could call for rate hikes.

Traders showed a muted reaction to the latest US economic data. Core Personal Consumption Expenditures (PCE) inflation rose by 0.4% MoM in February, in line with expectations, while the annual rate eased to 3.0% from 3.1%. Meanwhile, the final Q4 Gross Domestic Product (GDP) growth was revised down to 0.5% from 0.7%.

Attention now turns to the US Consumer Price Index (CPI) data due on Friday, with economists expecting the headline CPI to rise by 0.9% MoM, up from 0.3% in February, while annual inflation is seen accelerating to 3.3% from 2.4%.

Technical analysis: XAU/USD holds above 100-day SMA

In the daily chart, XAU/USD oscillates between its key moving averages, holding above the 100-day simple moving average (SMA) at $4,673.84 but remaining below the 50-day SMA at $4,914.57, which leaves the near-term tone broadly neutral after the recent pullback. The Relative Strength Index (RSI) at 49.33 is effectively flat around the midline, while the Average Directional Index (ADX) at 29.46 hints at a moderate but not dominant trend, suggesting price may continue to consolidate within this band until a decisive break emerges.

On the topside, immediate resistance is reinforced by the 50-day SMA at $4,914.57; a daily close above this barrier would reopen the path toward the prior highs and shift the bias back in favor of the bulls. On the downside, initial support is seen at the 100-day SMA near $4,673.84; a sustained drop below this latter level would expose XAU/USD to a deeper correction and signal that sellers are regaining control.

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