AUD/USD surges toward the 0.7260 region on Monday, supported by improving demand for commodity-linked currencies despite renewed geopolitical tensions after United States (US) President Donald Trump rejected Iran’s latest peace proposal, calling it “totally unacceptable.”
Scotiabank strategists Shaun Osborne and Eric Theoret report the Euro (EUR) is slightly softer versus the Dollar (USD), struggling against resistance in the upper 1.17s as softer European Central Bank (ECB) expectations weigh, partly offset by better risk sentiment.
BNP Paribas economists expect the US economy to grow above potential in 2026, with Gross Domestic Product (GDP) at 2.4% and inflation overshooting at 3.5%. They see the Fed Funds target range steady at 3.5%-3.75% as the Federal Open Market Committee (FOMC) adopts a two-sided outlook.
MUFG analysts argue that the Swedish Krona is underperforming as the Riksbank, central bank of Sweden, stays cautious despite the energy shock.
The Swiss Franc (CHF) regains traction against the US Dollar (USD) on Monday, with USD/CHF pulling back after opening the week with a bullish gap as the Greenback gives up part of its earlier gains while traders continue to monitor developments in the Middle East.
OCBC’s FX Christopher Wong describes USD/JPY as a two-way trade after suspected Ministry of Finance (MoF) intervention capped gains near 160. He notes bearish daily momentum but says fundamentals are not decisively Japanese Yen (JPY)-positive, with higher Oil prices still a drag.
TD Securities strategists expect the Bank of Canada (BoC) to hold its policy rate at 2.25% through 2026 before returning to a 2.75% neutral level in 2027 via 25 bp hikes in January and March.
Silver (XAG/USD) extends its rally on Monday and trades around $84.85 at the time of writing, up 5.60% on the day. The white metal continues its bullish momentum, breaking to fresh two-month highs, supported by strong safe-haven demand amid escalating geopolitical tensions in the Middle East.
ING’s Chris Turner notes the Dollar has started the week slightly stronger as hopes for a Middle East ceasefire fade and Oil prices jump. He highlights US April Consumer Price Index (CPI) as the key release, with expectations for higher headline and core inflation.
Scotiabank strategists Shaun Osborne and Eric Theoret note the Canadian Dollar (CAD) is a mild outperformer versus the US Dollar (USD), supported by firmer Oil, even as USD/CAD trades about one standard deviation above their fair value estimate.
MUFG analysts highlight that the Australian Dollar has outperformed since the Middle East conflict, supported by higher energy prices and a hawkish Reserve Bank of Australia.
United States Existing Home Sales Change (MoM) increased to 0.2% in April from previous -3.6%
