Major Fx Moves
EUR/USD rose towards 1.1550 but stayed capped after rebounding from intraday lows. GBP/USD climbed towards 1.3240, helped by a softer Dollar, while USD/JPY was steadier after earlier swings near 159.70 and attention on 160.00. AUD/USD advanced towards 0.6920 as risk sentiment improved. WTI held above $112.00, supported by Strait of Hormuz disruption and strike threats, while OPEC+ agreed to raise May output and ceasefire headlines limited further gains. Gold hovered near $4,660, little changed after earlier weakness. The calendar includes Australia’s TD-MI Inflation Gauge, EU HCOB PMIs and Sentix, US Durable Goods Orders, Canada’s Ivey PMI, Japan earnings and current account, and New Zealand’s RBNZ rate decision and policy review. WTI is a US crude benchmark traded via Cushing, with prices driven by supply and demand, OPEC decisions, political disruption, and the US Dollar. API and EIA inventory reports can move prices, with results within 1% of each other 75% of the time.2025 Versus Today
Looking back at this time in 2025, the market was driven by fears of conflict in the Strait of Hormuz, which pushed oil prices above $112 per barrel. Today, with WTI crude trading much lower around $86, that geopolitical risk premium has completely vanished. This suggests that derivative plays based on supply shocks are less viable, and focus should shift to economic demand indicators. Last April, the US Dollar Index was weakening toward 100 on hopes of a ceasefire, but now it’s holding firm above 104. The Federal Reserve’s commitment to keeping rates higher for longer, a stark contrast to last year’s caution, is supporting the dollar. With the 10-year Treasury yield staying elevated near 4.4%, options strategies should favor dollar strength against currencies with more dovish central banks. We saw EUR/USD surge toward 1.1550 in 2025 as the dollar softened, a level that seems distant from today’s reality below 1.08. Similarly, while last year’s focus was on Japanese intervention to stop USD/JPY from hitting 160, the pair now trades calmly around 152. The narrative has shifted from geopolitical risk to the persistent interest rate differential, making long dollar positions more structurally sound. In 2025, inflation concerns were tied directly to the energy shock, but now the focus is on sticky services inflation, with the latest CPI data showing a 3.5% annual increase. The extreme gold price of over $4,600 seen last year reflected a flight to safety from an active conflict. Today’s price, while strong near $2,350, is more a hedge against persistent inflation and central bank policy rather than imminent war. Create your live VT Markets account and start trading now.
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