The euro could rise further towards $1.20 if there is a de-escalation in the Iran war that leads to the reopening of the Strait of Hormuz, Societe Generale’s Kit Juckes says in a note. Even if energy prices ease, SocGen still expects the European Central Bank to raise rates in June and September, while the Federal Reserve leaves rates unchanged. “This is also what the market prices so should have little impact from here, but it does help make a further rise in euro-dollar all the more likely.” The euro rises 0.4% to $1.1806, the highest level since Feb. 27 before the conflict began, according to LSEG, after President Trump hinted at the chance of further peace talks. (renae.dyer@wsj.com)
Sterling Could Fall if BOE’s Bailey Dampens Rate Rise Bets
0946 GMT – Bank of England Governor Andrew Bailey could dampen expectations for interest-rate rises in a speech later, leaving sterling vulnerable, ING’s Francesco Pesole says in a note. Bailey could retain a balanced tone, “implicitly signalling that a pause is the preferred course of action for now.” The BOE is unlikely to raise rates as expected which could help lift the euro towards 0.88 pounds, Pesole says. The market is pricing 40 basis points of rate rises by year-end, LSEG data show. The BOE releases the text of Bailey’s speech in New York at 1605 GMT. The euro last trades flat at 0.8704 pounds. (renae.dyer@wsj.com)
Investors Increase Allocation to Dollar in April: BofA Survey
1001 GMT – Investors increased allocation to the dollar in April amid the ongoing conflict in the Middle East, according to Bank of America’s latest global fund manager survey. The survey showed investors closed earlier bets against the dollar falling following the currency’s recent gains driven by the Iran war. Investors were the least underweight the dollar since March 2025. Some 41% of investors said the dollar was overvalued, down from 46% in the March survey.(renae.dyer@wsj.com)
Euro’s Gains Could Prove Limited For Now
0858 GMT – The euro rises to a six-week high against a weaker dollar but is unlikely to rise much further even if European Central Bank President Christine Lagarde reiterates that interest-rate rises are possible, ING’s Francesco Pesole says in a note. “We feel that clear progress in U.S.-Iran talks is needed to sustainably take the euro above $1.180,” he says. Markets would be surprised if Lagarde said a potential de-escalation in the conflict reduced the need for monetary tightening, he says. Lagarde speaks in Washington at 2100 GMT. The market sees a 37% chance of an ECB rate rise on April 30 and fully prices two rate increases by year-end, LSEG data show. The euro rises to a high of $1.1796, according to LSEG data, after President Trump signalled the prospect of fresh peace talks. (renae.dyer@wsj.com)
Dollar Extends Losses on Hopes for Renewed U.S.-Iran Talks
0800 GMT – The dollar falls to a fresh six-week low against a basket of currencies on hopes for renewed U.S.-Iran talks to end the war. President Trump said the “right people” in Iran had reached out and still want to make a deal after talks between the two sides broke down at the weekend. The remarks improve risk sentiment and lower oil prices, weakening the dollar due to its safe-haven role and America’s position as a net oil exporter. “From here, we’ll need to see clearer progress towards a permanent ceasefire to take the DXY dollar index back to pre-war levels,” ING’s Francesco Pesole says in a note. The DXY falls to as low as 98.114. (renae.dyer@wsj.com)
SNB Possibly Intervened to Weaken Swiss Franc
0712 GMT – The Swiss franc’s recent weaker performance could reflect foreign exchange interventions from the Swiss National Bank SNBN 0.00%increase; green up pointing triangle, Commerzbank’s Michael Pfister says in a note. Following an initial rush to safe-haven assets in early March, the franc has become one of the worst-performing G-10 currencies, he says. It is possible the SNB has followed through on its threats to weaken the franc, although it could take some time before this is confirmed, Pfister says. The next data on forex market operations is not available until the end of June. However, market participants shouldn’t expect a high figure, he says. “After all, the SNB has barely intervened in the foreign exchange market since early 2024.” The euro trades flat at 0.9214 francs. (renae.dyer@wsj.com)
Dollar Stays Weaker on Hopes For Iran War De-Escalation
0642 GMT – The dollar trades close to a six-week low as hopes for progress towards ending the Iran war weaken oil prices and improve risk appetite. President Trump said the “right people” still want an Iran-U.S. deal after talks between the two sides collapsed at the weekend. Iran’s Foreign Minister Abbas Araghchi told his French counterpart Jean-Noël Barrot that negotiations had made progress on many issues despite failing to reach a deal. The news weakens the dollar due to its safe-haven role and America’s energy independence. The DXY dollar index trades steady at 98.361 but remains near a low of 98.297 reached overnight. (renae.dyer@wsj.com)
Bitcoin Rally Hinges on Break Above $75,000
0428 GMT – Bitcoin could stage a sharper rally if it breaks above $75,000 on strong volume, as a short squeeze can accelerate gains as traders buy back to cover positions, BTC Markets crypto analyst Rachael Lucas says. Bitcoin has been climbing on improved risk sentiment, as crude prices ease and weekly ETF inflows mark the strongest since January. Key levels remain in focus: $72,000 is seen as a floor, with a drop below to potentially send prices back toward $70,500. On the upside, $75,000 is the immediate ceiling, with trading volume critical to sustaining any breakout. Bitcoin rises 1.8% to $74,500.86, LSEG data show. (jason.chau@wsj.com)
China’s Yuan ‘Relatively Insulated’ From Middle East Events
0141 GMT — China’s yuan is “relatively insulated” from Middle East events, thanks to the country’s “relatively light energy import burden,” RBC Capital Markets’ Abbas Keshvani says in a research report. China’s net oil and gas imports amounts to 1.7% of GDP, the Asia macro strategist estimates. The yuan also benefits from safe-haven bids for Chinese government bonds, Keshvani says, adding that China’s low inflation and accommodative monetary policy have kept bond yields anchored at around 1.8%. RBC Capital Markets forecasts the dollar at 6.8200 yuan in 2Q, 6.8000 yuan in 3Q, and 6.7800 yuan in 4Q. The dollar is 0.1% lower at 6.8207 against onshore yuan, LSEG data show. (ronnie.harui@wsj.com)
Asian Currencies Consolidate as Traders Watch U.S.-Iran Developments
0030 GMT — Asian currencies consolidate against the dollar as traders eye a U.S.-Iran developments. President Trump said the “right people” in Iran still want a U.S.-Iran deal after talks in Pakistan over the weekend ended without an agreement. However, neither the U.S. nor Iran has publicly committed to another round of negotiations, CBA’s Carol Kong says in a research report. The U.S. blockade of the Strait of Hormuz will probably “test the durability of the fragile cease-fire and threatens to push the USD back up if the cease-fire collapses,” the economist and currency strategist adds. The dollar falls 0.2% to 159.18 yen, but is little changed at 1,478.60 won and is flat at 1.2732 Singapore dollar, LSEG data show. (ronnie.harui@wsj.com)
