FOREX: Dollar mixed after ceasefire extension in range bound trade
Idag, 16:20
(Alliance News) - The dollar was mixed and traded in a tight range on Wednesday, after the US and Iran extended a ceasefire.
The dollar index rose to 98.37 on Wednesday from 98.25 on Tuesday.
US President Donald Trump extended a ceasefire with Iran to allow more time for talks, claiming the Islamic Republic was "collapsing financially" because of the blockade of the Strait of Hormuz.
There was no word from Tehran on the ceasefire and an Iranian gunboat fired on a container ship off the coast of Oman, causing damage but no casualties, according to a British maritime security agency.
Trump, who said the US blockade of Iran's ports would continue, also said the Islamic republic was "collapsing financially" due to the blockade of Hormuz.
"They want the Strait of Hormuz opened immediately - Starving for cash! Losing 500 Million Dollars a day. Military and Police complaining that they are not getting paid. SOS!!!" he wrote on social media.
Sterling edged up to USD1.3518 on Wednesday from USD1.3514 on Tuesday.
Against the Australian dollar, the buck fell to AUD1.3953 from AUD1.3965. Versus its Canadian counterpart, the US currency was steady at CAD1.3650 from CAD1.3651.
Societe Generale analyst Kit Juckes commented: "We are still, unfortunately, watching paint dry..... economic data have held up better than feared but that is largely is a function of lags, rather than a reason to be optimistic. Every day the Strait of Hormuz is shut, more oil reserves are used up, increasing the risk of shortages. How can oil importers avoid a hit to growth if this drags on for even a few more weeks? FX winners continue to be oil exporters – BRL, MXN and COP in EM, NOK, USD, CAD, GBP and er….AUD in G10.
"This is generous to the UK which only exports 30% of the oil that Norway does but short GBP was a popular trade at the start of the war and that has helped it since. Australia remains enigmatic – a major exporter of coal and natural gas that imports oil derivatives – but we are not alone in thinking it will perform strongly once oil supplies are revived."
As far as the losers in the currency space amid the war go, Juckes said the euro, yen and franc are among them. Against the dollar, the Swiss franc fell to USD1.2785 on Wednesday from USD1.2820 on Tuesday. Against the yen, the buck rose to JPY159.17 from JPY158.14, while the euro fell to USD1.1740 from USD1.1759.
Before the onset of the conflict, the Swiss franc bought USD1.2992 and the euro USD1.1812. The dollar had traded at JPY156.04 against the yen.
Juckes added: "Risk aversion is likely to keep FX volatility down and G10 pairs in tight ranges, starting with EUR/USD. Two-year rates imply that EUR/USD 'ought' to be at 1.14 and if consensus rates forecasts are right, will head to 1.17 in the coming year. Assuming the market is forward-looking, the current level is fine, then.
"Given that every time the market is optimistic that further escalation is unlikely, the dollar weakens, it still seems likely that we will see EUR/USD 1.20 again, and a generally weaker dollar, in the coming weeks. But for EUR/USD this means economics argues for a fall below 1.15 this year, while US policy uncertainty argues for a rise above 1.20. The current 1.1750 might as well be seen as the average of those two outcomes, which defines the range we find ourselves in."
The pound bought EUR1.1512 against the euro, up from EUR1.1493 a day prior.
Headline UK inflation accelerated in March, according to data from the Office for National Statistics.
Consumer price inflation picked up to 3.3%, from 3.0% in February.
Commerzbank analyst Michael Pfister noted that away from the data, "political risks" loom over sterling again.
"Prime Minister Keir Starmer is still facing heavy criticism over the Epstein affair. Yesterday, a former senior government official who was dismissed by Starmer last week testified before Parliament that Starmer had allegedly pressured him to appoint Mandelson, the former British Ambassador to the US. Starmer himself had to testify on Monday, but he did little to dispel the doubts. Following the local elections in May, in which Labour is expected to suffer a clear defeat based on the latest poll results, calls for Starmer's resignation are likely to gain momentum again," the analyst said.
"We remain sceptical about the pound in the medium term."
By Eric Cunha, Alliance News news editor
Comments and questions to newsroom@alliancenews.com
Copyright 2026 Alliance News Ltd. All Rights Reserved.
FOREX: Dollar mixed after ceasefire extension in range bound trade
Idag, 16:20
(Alliance News) - The dollar was mixed and traded in a tight range on Wednesday, after the US and Iran extended a ceasefire.
The dollar index rose to 98.37 on Wednesday from 98.25 on Tuesday.
US President Donald Trump extended a ceasefire with Iran to allow more time for talks, claiming the Islamic Republic was "collapsing financially" because of the blockade of the Strait of Hormuz.
There was no word from Tehran on the ceasefire and an Iranian gunboat fired on a container ship off the coast of Oman, causing damage but no casualties, according to a British maritime security agency.
Trump, who said the US blockade of Iran's ports would continue, also said the Islamic republic was "collapsing financially" due to the blockade of Hormuz.
"They want the Strait of Hormuz opened immediately - Starving for cash! Losing 500 Million Dollars a day. Military and Police complaining that they are not getting paid. SOS!!!" he wrote on social media.
Sterling edged up to USD1.3518 on Wednesday from USD1.3514 on Tuesday.
Against the Australian dollar, the buck fell to AUD1.3953 from AUD1.3965. Versus its Canadian counterpart, the US currency was steady at CAD1.3650 from CAD1.3651.
Societe Generale analyst Kit Juckes commented: "We are still, unfortunately, watching paint dry..... economic data have held up better than feared but that is largely is a function of lags, rather than a reason to be optimistic. Every day the Strait of Hormuz is shut, more oil reserves are used up, increasing the risk of shortages. How can oil importers avoid a hit to growth if this drags on for even a few more weeks? FX winners continue to be oil exporters – BRL, MXN and COP in EM, NOK, USD, CAD, GBP and er….AUD in G10.
"This is generous to the UK which only exports 30% of the oil that Norway does but short GBP was a popular trade at the start of the war and that has helped it since. Australia remains enigmatic – a major exporter of coal and natural gas that imports oil derivatives – but we are not alone in thinking it will perform strongly once oil supplies are revived."
As far as the losers in the currency space amid the war go, Juckes said the euro, yen and franc are among them. Against the dollar, the Swiss franc fell to USD1.2785 on Wednesday from USD1.2820 on Tuesday. Against the yen, the buck rose to JPY159.17 from JPY158.14, while the euro fell to USD1.1740 from USD1.1759.
Before the onset of the conflict, the Swiss franc bought USD1.2992 and the euro USD1.1812. The dollar had traded at JPY156.04 against the yen.
Juckes added: "Risk aversion is likely to keep FX volatility down and G10 pairs in tight ranges, starting with EUR/USD. Two-year rates imply that EUR/USD 'ought' to be at 1.14 and if consensus rates forecasts are right, will head to 1.17 in the coming year. Assuming the market is forward-looking, the current level is fine, then.
"Given that every time the market is optimistic that further escalation is unlikely, the dollar weakens, it still seems likely that we will see EUR/USD 1.20 again, and a generally weaker dollar, in the coming weeks. But for EUR/USD this means economics argues for a fall below 1.15 this year, while US policy uncertainty argues for a rise above 1.20. The current 1.1750 might as well be seen as the average of those two outcomes, which defines the range we find ourselves in."
The pound bought EUR1.1512 against the euro, up from EUR1.1493 a day prior.
Headline UK inflation accelerated in March, according to data from the Office for National Statistics.
Consumer price inflation picked up to 3.3%, from 3.0% in February.
Commerzbank analyst Michael Pfister noted that away from the data, "political risks" loom over sterling again.
"Prime Minister Keir Starmer is still facing heavy criticism over the Epstein affair. Yesterday, a former senior government official who was dismissed by Starmer last week testified before Parliament that Starmer had allegedly pressured him to appoint Mandelson, the former British Ambassador to the US. Starmer himself had to testify on Monday, but he did little to dispel the doubts. Following the local elections in May, in which Labour is expected to suffer a clear defeat based on the latest poll results, calls for Starmer's resignation are likely to gain momentum again," the analyst said.
"We remain sceptical about the pound in the medium term."
By Eric Cunha, Alliance News news editor
Comments and questions to newsroom@alliancenews.com
Copyright 2026 Alliance News Ltd. All Rights Reserved.
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