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).
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.
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 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%.
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.
Gold (XAU/USD) remains range-bound on Thursday as markets closely monitor developments surrounding the fragile ceasefire in the Middle East.
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.
United States 4-Week Bill Auction dipped from previous 3.62% to 3.56%
ING strategists Francesco Pesole, Frantisek Taborsky and Chris Turner note that the US Dollar (USD) has stabilised after Iran said the ceasefire was violated, but still see scope for renewed weakness.
The Euro (EUR) trades on the front foot against the US Dollar (USD) on Thursday as the Greenback remains under pressure following the US-Iran ceasefire and hopes for de-escalation. At the time of writing, the pair is trading around 1.1676, extending gains for the fourth straight day.
Scotiabank strategists Shaun Osborne and Eric Theoret report that the Pound (GBP) is consolidating Wednesday’s strong rebound versus the US Dollar (USD), with domestic risk limited ahead of upcoming Bank of England (BoE) speeches and data.
Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), said on Thursday that central banks should hike interest rates if inflation expectations threaten to de-anchor and ignite an inflation spiral, per Reuters.
