Forex Today: Markets remain cautious as Trump’s deadline approaches
Here is what you need to know on Tuesday, April 7:
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Forex Today: Markets remain cautious as Trump’s deadline approaches
Here is what you need to know on Tuesday, April 7:
Markets cling to a cautious stance early Tuesday as United States (US) President Donald Trump's 20:00 EST deadline for Iran to reach an agreement to end the war nears. In the second half of the day, the US economic calendar will feature weekly ADP Employment Change 4-week Average data and the US Census Bureau will publish Durable Goods Orders for February.
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.61% | -0.39% | 0.10% | -0.02% | -0.86% | 0.39% | 0.03% | |
| EUR | 0.61% | 0.30% | 0.72% | 0.66% | -0.20% | 1.00% | 0.70% | |
| GBP | 0.39% | -0.30% | 0.44% | 0.34% | -0.50% | 0.74% | 0.42% | |
| JPY | -0.10% | -0.72% | -0.44% | -0.13% | -1.10% | 0.27% | -0.02% | |
| CAD | 0.02% | -0.66% | -0.34% | 0.13% | -0.90% | 0.40% | 0.07% | |
| AUD | 0.86% | 0.20% | 0.50% | 1.10% | 0.90% | 1.28% | 0.92% | |
| NZD | -0.39% | -1.00% | -0.74% | -0.27% | -0.40% | -1.28% | -0.33% | |
| CHF | -0.03% | -0.70% | -0.42% | 0.02% | -0.07% | -0.92% | 0.33% |
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).
US President Trump told reporters late Monday that every bridge and every powerplant in Iran will be destroyed by midnight Tuesday if Iran doesn't agree to a deal that is acceptable to him, adding that opening the Strait of Hormuz fully must be part of it.
In response, Iran's top joint military command called Trump's threats 'delusional' and said that those threats won't make up for the US' 'humiliation and disgrace' in the Middle East. Additionally, an advisor to Iran's Parliament Speaker Mohammad Bagher Ghalibaf said on Tuesday that US President Donald Trump has about 20 hours to either surrender to Iran, or his allies will return to the Paleolithic Age.
After posting marginal losses on Monday, the US Dollar (USD) Index stabilizes near 100.00 in the European morning on Tuesday. US stock index futures lose between 0.3% and 0.5%, while crude Oil price edge higher, with the barrel of West Texas Intermediate (WTI) rising about 1% on the day near $105.00.
The data from the US showed on Monday that the business activity in the service sector expanded at a healthy pace in March, with the Institute for Supply Management's (ISM) Services Purchasing Managers' Index (PMI) coming in at 54. On a negative note, the Employment Index of the survey dropped to 45.2 from 51.8 in February, highlighting a decline in the service sector payrolls. Finally, the Prices Paid Index climbed to 70.7 from 63, reflecting stronger input inflation.
EUR/USD trades in a narrow channel at around 1.1550 after posting small gains on Monday.
GBP/USD gained 0.3% and snapped a two-day losing streak on Monday. The pair stays in a consolidation phase above 1.3200 in the European morning on Tuesday.
NZD/USD edges lower and trades near 0.5700 after closing in negative territory on Monday. In the early trading hours of the Asian session on Wednesday, the Reserve Bank of New Zealand (RBNZ) will announce monetary policy decisions.
USD/JPY failed to make a decisive move in either direction on Monday and ended the day virtually unchanged. The pair extends its sideways grind and trades below 160.00 early Tuesday.
Gold (XAU/USD) managed to erase a small portion of its losses after opening the week with a bearish gap but failed to gather momentum. XAU/USD stays quiet early Tuesday and holds above $4,600.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
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CAD: A strong hedge against energy risks – BBH
Brown Brothers Harriman’s (BBH) Elias Haddad expects Canada’s March labor force survey to show a modest job rebound, while the Bank of Canada (BoC) can use its benign inflation backdrop to look through the Oil shock.
NZD/USD Price Forecast: Struggles above YTD low, around 0.5700 amid geopolitical risks
The NZD/USD pair struggles to capitalize on the previous day's modest gains and trades with a negative bias around the 0.5700 mark during the early European session on Tuesday.
纽元/美元价格预测：在地缘政治风险下，年初至今低点附近0.5700挣扎
纽元/美元货币对难以利用前一天的温和涨幅，在周二欧洲时段早盘于0.5700附近承压，呈现出下行偏向。
美元：降级局势被视为美元趋势走软 – 华侨银行
华侨银行策略师黄志伟和沈慕祥指出，随着霍尔木兹海峡风险和能源中断威胁演变为更广泛的能源冲击，全球市场保持谨慎。调查数据显示，投入成本上升，交货时间延长。
Spain HCOB Services PMI came in at 53.3, above expectations (50.8) in March
Spain HCOB Services PMI came in at 53.3, above expectations (50.8) in March
USD: De-escalation seen softening Dollar trend – OCBC
OCBC strategists Christopher Wong and Sim Moh Siong note that global markets are cautious as Hormuz risks and energy disruptions threaten to evolve into a broader energy shock. Survey data already show rising input costs and longer delivery times.
英镑/日元 价格分析：多头突破211.50阻力区
英镑/日元周二连续第二天上涨。多头推动该货币对突破上周交易区间顶部211.50附近，写稿时触及4月新高211.65以上。
GBP/JPY Price Analysis: Bulls broke the 211.50 resistance area
The Pound (GBP) trades higher against the Japanese Yen (JPY) for the second consecutive day on Tuesday. Bulls have pushed the pair above the top of last week’s trading range, at the 211.50 area, reaching fresh April highs above 211.65 at the time of writing.