The US Dollar Index (DXY) hovered near 98.50 as markets awaited central bank meetings. The Federal Reserve, European Central Bank, Bank of Japan and Bank of England were expected to keep rates unchanged, with guidance in focus.
Iran’s Foreign Minister Abbas Araghchi said Tehran is considering a request for talks from US President Donald Trump. Markets stayed cautious amid disruption in the Strait of Hormuz, which supported higher oil prices.
Central Bank Focus
EUR/USD traded near 1.1720 ahead of the ECB decision. GBP/USD held around 1.3530, while USD/JPY fell towards 159.40 before the BoJ, which was expected to keep rates at 0.75%.
AUD/USD rose near 0.7190 as demand for the US Dollar eased. WTI held near $96.40 per barrel, and gold traded around $4,683 per ounce.
Key events included Japan’s BoJ decision and US ADP jobs, housing prices and consumer confidence on Tuesday, 28 April. Wednesday included Australia CPI, Canada’s BoC decision, and the US Fed decision.
Thursday brought UK BoE and ECB decisions plus US core PCE, Q1 GDP and jobless claims, with Tokyo CPI also due.
Market Drivers Overview
Friday included US ISM manufacturing PMI, Canada manufacturing PMI, and Australia Q1 producer prices.
WTI is a US crude benchmark traded via the Cushing hub. Prices are driven by supply and demand, geopolitics, OPEC decisions, the US Dollar, and API and EIA inventory data, which are within 1% of each other 75% of the time; OPEC has 12 members and OPEC+ adds ten non-OPEC states.
Last year at this time, we saw the US Dollar Index cautiously trading near 98.50 ahead of a packed week of central bank meetings. Today, the dollar is significantly stronger, holding firm above the 105 level as the Federal Reserve has maintained higher interest rates longer than other major central banks. This ongoing policy divergence means that derivative strategies betting on continued dollar strength against currencies like the euro remain in play.
We remember the market’s anxiety in 2025 over potential US-Iran talks, which kept WTI crude oil prices elevated above $96 per barrel. While geopolitical risks are a constant, a year of resilient global supply and concerns about slowing economic growth have brought WTI crude back to a more stable range in the mid-$80s. Traders should now watch inventory data closely, as a surprise build-up could easily push prices below the key $80 support level, making put options an attractive hedge.
In April 2025, the euro was trading at a much stronger 1.1720 as the market waited for the European Central Bank to address inflation. Now, with the EUR/USD pair struggling around 1.0650, it is clear the ECB’s pivot toward easing policy has weighed heavily on the currency, especially as recent data confirmed Eurozone inflation fell to 2.4%. This trend suggests that selling EUR/USD futures on any significant rallies continues to be a viable approach for the coming weeks.
A year ago, we anticipated a hawkish turn from the Bank of Japan with USD/JPY sitting just under 160. While the BoJ did indeed end its negative interest rate policy in late 2025, the wide rate differential with the US has kept the yen weak, pushing the USD/JPY pair above 160. This environment favors carry trades, but traders using call options should remain cautious of potential verbal or physical intervention from Japanese authorities.
Gold’s price was exceptionally high in 2025, trading near $4,683 per ounce amid a complex mix of geopolitical safe-haven demand and pressure from high interest rates. The market has since recalibrated, with gold now trading closer to a more sustainable $2,450 an ounce as the reality of positive real yields sets in. This suggests that unless the Federal Reserve signals a sharp pivot towards rate cuts, selling rallies in gold futures might be the prudent move.
