Forex Today: Ongoing tensions in the Middle East leave investors cautious
Key Updates for Monday, April 6
As the new week begins, financial markets remain cautious while investors monitor ongoing tensions in the Middle East. On Monday, attention turns to the US economic agenda, with the Institute for Supply Management (ISM) set to release its Services Purchasing Managers' Index (PMI) for March.
US President Donald Trump has imposed a deadline of 8:00 PM EST on Tuesday for Iran to reopen the Strait of Hormuz, warning of potential strikes on Iranian infrastructure such as power plants and bridges if demands are not met. Iran has warned that any US action would be met with a significantly stronger response. Meanwhile, Axios reported that the US, Iran, and regional mediators are working toward a possible 45-day ceasefire, according to sources familiar with the negotiations.
During early European trading hours on Monday, US stock index futures show mixed performance. The US Dollar (USD) Index is holding just above 100.00, maintaining its recent gains from last Thursday and Friday. Oil prices are pulling back, with West Texas Intermediate crude trading near $103 per barrel after last week's surge of over 10%.
Data from the US Bureau of Labor Statistics released Friday revealed that Nonfarm Payrolls (NFP) increased by 178,000 in March, rebounding from a revised decline of 133,000 in February and surpassing expectations of a 60,000 rise. The unemployment rate dipped to 4.3% from 4.4%, while the labor force participation rate slipped to 61.9% from 62%. Annual wage growth, as reflected by Average Hourly Earnings, eased to 3.5% from 3.8%.
Currency and Commodity Market Overview
- EUR/USD: The pair is trading sideways above 1.1500 in early European hours after modest gains last week. Investors are also watching the release of the Sentix Investor Confidence Index for April.
- GBP/USD: Sterling is making a slight recovery, moving above 1.3200 after declining for two consecutive days.
- Gold: Gold prices dropped over 1.5% before the Easter break and began the week with a minor downward gap, but have since stabilized. XAU/USD is holding above $4,650 in European trading.
- USD/JPY: The currency pair is confined to a tight range above 159.50 during Monday’s European session.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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