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22.04.2024 Market Report


EUR/USD is clinging to recovery gains above 1.0650 in the Asian session on Monday. The pair regains lost footing, as markets remain upbeat and weigh negatively on the safe-haven US Dollar. Markets reposition ahead of key Eurozone and US data due later this week. 


GBP/USD attracts some dip-buyers on Monday amid a softer USD, though lacks follow-through. Easing geopolitical tensions boosts investors’ confidence and undermines the safe-haven buck. Reduced Fed rate cut bets should help limit the USD losses and cap any further gains for the pair.


The Japanese Yen (JPY) remains depressed against its American counterpart and languishes near a multi-decade low during the Asian session on Monday. The Bank of Japan’s (BoJ) cautious approach towards further policy tightening, along with expectations that the Federal Reserve (Fed) will delay cutting interest rates, suggests that the US-Japan rate differential will stay wide. This, along with hopes that the Iran-Israel conflict will not escalate further, turns out to be a key factor that is seen undermining the safe-haven JPY. 


The Australian Dollar (AUD) breaks its two-day losing streak on Monday amid risk-on sentiment, supported by indications of de-escalating geopolitical tensions. An Iranian official’s statement suggesting no immediate plans for retaliation against Israeli airstrikes contributes to the improved sentiment.


The NZD/USD pair remains under selling pressure around 0.5880 on Friday during the early European session. The risk-off environment amid the escalating tension between Israel and Iran lifts the Greenback and weighs on NZD/USD. Meanwhile, the US Dollar Index (DXY) edges higher above 106.20, nearly the highest level since November 2023. 


USD/CAD continues its decline for the fourth consecutive session, hovering around 1.3720 during Asian trading hours on Monday. This downward movement may be attributed to the subdued performance of the US Dollar (USD) despite the rise in US Treasury yields. However, the downside potential for the USD/CAD pair could be limited due to comments from Federal Reserve (Fed) officials hinting at a shift towards a more hawkish stance.


The US Dollar has retraced previous losses, as news of an Israeli attack on Iran boosted the safe-haven CHF, to consolidate at previous ranges, above the 0.9075 area.


Oil prices fell on Monday, dragged down by a renewed focus on market fundamentals as Israel and Iran played down the risks of an escalation of hostilities in the Middle East after Israel’s apparently small strike on Iran.


Gold price drifts lower on Monday amid hopes that the Iran-Israel conflict will not escalate further. Reduced Fed rate cut bets are keeping the US bond yields elevated and also exert pressure on the metal. The fundamental backdrop warrants caution before positioning for any further depreciating move.

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