The USD slips, oil extends gains, equity markets are mixed, and US yields ease amid increasing investor caution. The U.S. dollar held above recent lows after Federal Reserve minutes showed policymakers are in no rush to cut interest rates, with some even open to further hikes if inflation remains sticky. While the greenback eased slightly, it stayed supported by resilient U.S. data and geopolitical tensions, as markets reassessed the outlook for Fed policy amid signs of division within the central bank. Global equities were mixed, with Asian markets edging higher while U.S. futures and European stocks retreated amid renewed caution over the outlook for artificial intelligence and rising oil prices. S&P 500 and Nasdaq 100 futures slipped, and European shares pulled back from record highs, as investors rotated away from megacap tech and reassessed valuations. oil prices extended gains, with Brent holding above $70 per barrel amid ongoing geopolitical and supply concerns, while gold traded largely flat at elevated levels. Bitcoin edged sideways and remained capped below $68,000, struggling to break through near-term resistance. Today sees a light economic calendar, with markets focusing on US Jobless Claims, with investors expected to remain sidelined ahead of the US Core PCE report on Friday.
In the news. The US warns Iran to make a deal as it steps up military deployments. Andrew Mountbatten-Windsor is arrested on suspicion of misconduct. Christine Lagarde's move to run the World Economic Forum is not a 'foregone conclusion'. Accenture combats AI refuseniks by linking promotions to log-ins. The IMP calls on China to halve industrial subsidies. Blue Owl permanently halts redemptions at fund aimed at retail investors. Bill Gates pulls out of the India AI summit amid anger over organizational lapses. Top US commander makes surprise visit to Venezuela for security talks. Canada prioritizes top talent in the 2026 immigration Express Entry categories. Canada & Mexico want a trilateral agreement under USMCA review, Canadian minister says.
In currency markets. Currency markets are trading in tight ranges as investors await a heavy slate of data on Friday, with particular focus on the U.S. core PCE price index — the Federal Reserve’s preferred inflation gauge. The report is expected to provide crucial guidance on the Fed’s rate path, keeping FX volatility subdued as traders avoid large positions ahead of the release. CNY & Asian currencies are flat with the Luna and Ramadan holidays. Trading currencies are steady, with ZAR weakening 0.7%, NOK, PLN, KWD, & MXN easing 0.2%, CHF down 0.2%, DKK & JPY flat, while NZD, AUD & CZK firmed 0.15% against the US dollar.
In commodity markets. Oil, Natural Gas & Silver prices rallied 1.2%. Gold prices are flat. Copper prices weakened 1%. Coffee & Soybean prices firmed 0.4%, and Wheat prices advanced 0.9%.
CAD is hovering just below the 1.3700 level, with the loonie edging slightly higher in early trading as firmer oil prices lend modest support to the CAD. The broader U.S. dollar remains underpinned after Fed minutes signalled no urgency to cut rates, keeping the pair elevated. Markets are likely to remain steady ahead of Friday’s key U.S. core PCE inflation report and Canada’s Retail Sales data, which could provide the next directional catalyst.
EURCAD slipped in early trading as firmer oil prices supported the commodity-linked Canadian dollar. The loonie’s strength offset recent euro stabilization following ECB leadership speculation, keeping the cross under pressure.
EUR has steadied after an earlier selloff linked to speculation about a potential early departure of ECB President Christine Lagarde, but it remains capped below 1.1800 against the U.S. dollar. The greenback is trading in a narrow range as investors await Friday’s key U.S. core PCE inflation report, along with German and broader Eurozone PMI data, for clearer direction.
GBPEUR slipped toward the 1.1430 area after UK inflation cooled to 3.0%, reinforcing expectations of a Bank of England rate cut and weighing on sterling. Speculation over a potential early departure of ECB President Christine Lagarde has added uncertainty to the euro, though it remains relatively supported against the pound.
GBP has stalled just below the 1.3500 level in early trading, with the pound struggling to build momentum despite a modest improvement in overall risk sentiment. Sterling remains weighed down by expectations that the Bank of England could move ahead with rate cuts in the coming months following softer UK data. Attention now turns to Friday’s key U.S. core PCE inflation report and upcoming UK PMI releases, which could provide the next catalyst for the pair.
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