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CAD dips vs USD; Oil strength to limit losses and cap USD/CAD

  • USD/CAD edges higher during the Asian session on Tuesday, though the upside seems limited.
  • The uncertainty over US-Iran peace talks revives USD demand and lends support to spot prices.
  • Elevated Oil prices underpin the Loonie and cap the pair ahead of the BoC/Fed rate decisions.

The USD/CAD pair reverses a modest Asian session dip on Tuesday and looks to build on the previous day’s modest rebound from sub-1.3600 levels, or the lowest since March 12. Spot prices currently trade around the 1.3630 region, though the upside potential seems limited amid a combination of diverging forces.

Mixed signals over US-Iran peace talks assist the US Dollar (USD) to attract some safe-haven flows and turn out to be a key factor acting as a tailwind for the USD/CAD pair. In fact, Iran reportedly gave the ‌US a new proposal on reopening the Strait of Hormuz and ending the war, with nuclear negotiations postponed for a ‌later stage. However, the Wall Street Journal reported that US President Donald Trump was skeptical about Iran not dealing in good faith or being open to meeting his key demand of ending nuclear enrichment.

Meanwhile, continued disruptions to shipping through the critical Strait of Hormuz remain supportive of elevated Crude Oil prices, which underpins the commodity-linked Loonie and keeps a lid on the USD/CAD pair. Traders also seem reluctant to place aggressive directional bets and might opt to move to the sidelines ahead of this week’s key central bank event risks. The Bank of Canada (BoC) is scheduled to announce its policy decision on Wednesday, and will be followed by the outcome of the highly anticipated two-day FOMC meeting.

Investors will look for fresh cues about the future policy outlook amid expectations that the war-driven surge in energy prices will rekindle inflationary pressures. This, in turn, will play a key role in determining the next leg of a directional move for the USD/CAD pair. The mixed fundamental backdrop, in turn, makes it prudent to wait for strong follow-through buying before confirming that the pair’s recent fall, witnessed since the beginning of this month, has run its course and positioning for any meaningful recovery in the near term.

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GBP softens as markets await Fed and BoE rate decisions

  • GBP/USD drifts lower to near 1.3525 in Tuesday’s early Asian session.
  • Fed is widely expected to leave rates unchanged at 3.50%–3.75% at its April meeting on Wednesday.
  • The BoE is likely to keep rates on hold on Thursday. 

The GBP/USD pair trades in negative territory around 1.3525 during the early Asian session on Tuesday. The Pound Sterling (GBP) softens against the US Dollar (USD) as traders prefer to wait on the sidelines ahead of the Federal Reserve (Fed) and the Bank of England (BoE) later this week. 

The Fed is likely to keep the federal funds rate between 3.50% and 3.75%, where it has sat since January. Deutsche Bank analysts noted a repricing of Fed policy toward a more hawkish stance, driven by persistent oil-related inflation. 

Traders will closely watch Jerome Powell’s press conference after the meeting for fresh impetus. Any hawkish comments from Fed officials could provide some support to the Greenback and create a headwind for the major pair. 

Markets expect the UK central bank to keep interest rates on hold on Thursday, and traders will be watching for any signs ‌it is moving towards raising rates. Analysts see the UK economy as particularly vulnerable to the rise in energy prices caused by the war due to the country’s heavy use of natural gas.

“Our baseline forecast assumes Bank Rate will remain on hold for the rest of the year,” said Edward Allenby, senior UK economist at Oxford Economics. “The committee will have more information about how the energy shock is feeding through to the economy by the end-July meeting,” Allenby added.  

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AUD/JPY holds losses below 114.50 as BoJ keeps rate steady at 0.75%

  • AUD/JPY loses ground to around 114.30 in Tuesday’s Asian session. 
  • BoJ kept the policy rate unchanged at 0.75% at its April policy meeting on Tuesday. 
  • The Australian March CPI inflation report will be the highlight later on Wednesday. 

The AUD/JPY cross declines to near 114.30 during the Asian trading hours on Tuesday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) after the Bank of Japan’s (BoJ) interest rate decision. Traders will closely monitor Governor Kazuo Ueda’s press conference for any hints about the next move.

As widely expected, the BoJ decided to hold the short-term interest rate steady at 0.75% after concluding its two-day monetary policy review meeting on Tuesday. According to the BoJ’s policy statement, the central bank will continue to raise interest rates in accordance with developments in the economy, prices, and financial markets. It said wages and prices may face upward pressure more than what the output gap suggests. The BoJ will scrutinize the timing and pace of policy adjustment with a close eye on economic and price impact from Middle East war developments. 

The attention will shift to the BoJ’s Governor Kazuo Ueda press conference for more clues about the interest rate path in Japan. Any hawkish comments from policymakers could lift the JPY and act as a headwind for the cross.

On the Aussie front, the Reserve Bank of Australia (RBA) is anticipated to raise the Official Cash Rate (OCR) for a third consecutive time at its next meeting on May 5, 2026. Markets are pricing in a 74% chance of another 25-basis-point increase to 4.35% in the May policy meeting, according to Reuters. 

Traders will take more cues from the Australian March Consumer Price Index (CPI) inflation data on Wednesday for fresh impetus. The headline CPI is projected to show a rise of 4.7% YoY in March, compared to 3.7% in February. Any signs of hotter inflation in Australia could lift the Aussie against the JPY. 

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USD/JPY: Convergence delayed but capped by intervention – HSBC

HSBC strategists highlight that the Japanese Yen (JPY) has been the weakest G10 currency month-to-date, with USD/JPY trading in an unusually narrow range despite Japan’s large net energy import status and Gulf exposure. They argue a cautious Bank of Japan (BoJ) and domestic fiscal issues may delay USD/JPY’s move lower, although intervention risks and portfolio inflows should cap upside. HSBC’s base case still sees USD/JPY declining by year-end.

BoJ caution and fiscal strains vs caps

“Bearish sentiment towards JPY is consistent with Japan’s macro exposure. Japan is the largest net energy importer among advanced economies (scaled by GDP) and has deep economic ties with the Gulf region.”

“Despite these headwinds, USD-JPY has traded in an unusually narrow range recently. A cautious Bank of Japan (BoJ) and domestic fiscal challenges may delay USD/JPY’s convergence lower towards levels implied by rate differentials.”

“Key fiscal watchpoints include the possibility that funding for fuel subsidies may run out in mid/late May and that a supplementary budget may be proposed.”

“Offsetting factors include net portfolio inflows (foreign buying of Japanese equities and bonds month-to-date in April, alongside Japanese selling of foreign bonds) and firm verbal intervention from the Ministry of Finance, may help cap USD/JPY.”

“Our base case remains for USD/JPY to decline by year-end. Near-term upside risks include a more dovish BoJ, a more hawkish Federal Reserve (Fed), escalation in the Middle East conflict and renewed oil-price highs, and further fiscal slippage in Japan.”

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AUD/USD rallies to 10-day highs near 0.7200 amid US Dollar weakness

  • AUD/USD rallies more than 0.5% to reach session highs near 0.7200.
  • Moderate hopes of a US-Iran peace deal are feeding a mild risk appetite on Monday.
  • The US Fed decision and Australian CPI will gather investors’ focus this week.

The Australian Dollar (AUD) accelerates its rally against a weak US Dollar (USD) on Monday, reaching 10-day highs at 0.7190 at the time of writing, after bouncing from lows near 0.7100 last week. News of a peace proposal from Tehran and hopes that high energy prices will boost inflation and force the Reserve Bank of Australia (RBA) to hike rates next week are keeping the Aussie buoyed.

A report published by Axios earlier on Monday, citing a US official and sources related to the matter, affirmed that Tehran has sent a peace proposal to the US, offering to end the war and reopen the Strait of Hormuz, and to postpone nuclear conversations to a later stage. This news helps sustain hopes of a negotiated end to the conflict and adds weight to the US Dollar.

Central banks return to the focus

The US Federal Reserve (Fed) will also come into focus this week. The US central bank’s Federal Open Market Committee (FOMC) meets on Wednesday and is widely expected to leave interest rates unchanged at the 3.50%-3.75% rate.

The bank is also likely to hint at a steady policy for the next few months. The rising inflationary pressures stemming from Iran’s war have prompted markets to dial down hopes of interest rate cuts this year, and the CME Fed Watch Tool shows that futures markets price a 66% chance that monetary policy will remain on hold by the end of the year. Investors were betting on between one and two rate cuts before the war started.

Before that, Australian Consumer Price Index (CPI) figures will provide further insight about next week’s RBA decision. Inflation is expected to have accelerated in the first month of the US-Iran war, boosting speculation that the central bank might hike interest rates for the third consecutive time in May. These rumours are keeping the Aussie Dollar close to multi-year highs against the US Dollar.

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EUR/USD: EU policy risks and weaker German sentiment – BNY

BNY’s Bob Savage highlights that China has criticized the European Union’s (EU) proposed Industrial Accelerator Act as discriminatory, warning of possible countermeasures that could affect trade and investor confidence. He also notes a sharp deterioration in Germany’s consumer climate, with GfK sentiment at its weakest since February 2023, as higher energy prices and Iran-related geopolitical tensions weigh on the Euro area outlook and EUR/USD.

Policy frictions and soft German data

“China’s commerce ministry has criticized the EU for its proposed Industrial Accelerator Act. It formally submitted comments on April 24 outlining strong concerns over what it views as discriminatory provisions against foreign investors.”

“It contends that these measures violate core World Trade Organization principles, including most favored nation and national treatment rules, and could undermine fair competition and investor confidence.”

“Germany’s consumer climate for May deteriorated sharply, with the GfK headline indicator falling to -33.3 from -28.1 in April. This marks a 5.2-point decline and the weakest reading since February 2023.”

“Economic expectations deteriorated further to -13.7, reflecting concerns that geopolitical tensions, particularly the Iran conflict, could derail Germany’s fragile recovery outlook.”

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EUR/USD holds supported as Dollar softens, central bank decisions loom

  • EUR/USD remains supported at the start of the week, helped by a weaker US Dollar amid geopolitical uncertainty.
  • German consumer sentiment deteriorates more than expected, reflecting current economic tensions.
  • Markets await the Fed and ECB monetary policy decisions later this week.

EUR/USD trades around 1.1740 on Monday, up 0.21% on the day, extending Friday’s rebound from the 1.1670 area, despite a more fragile macroeconomic backdrop in the Eurozone.

Latest data from Germany show a marked deterioration in consumer confidence. The GfK index falls to -33.3 in May, its lowest level in more than three years, from -28.1 previously and well below market expectations. This decline highlights the ongoing impact of geopolitical tensions and rising energy prices on European households. However, the Euro’s (EUR) reaction remains limited, as investors currently focus on external drivers.

The main market catalyst remains developments in the Middle East. Hopes for easing tensions between the United States (US) and Iran are supporting risk appetite, weighing on demand for the safe-haven US Dollar (USD). According to reports from Axios, Tehran has submitted a new peace proposal that includes reopening the Strait of Hormuz, fostering cautious optimism. Nevertheless, negotiations remain stalled, and disruptions to Oil supply keep Crude prices near $100 per barrel, a level that could weigh on global growth.

In this context, the US Dollar Index (DXY) is declining, reflecting broad-based weakness in the Greenback. Expectations that the Federal Reserve (Fed) will keep interest rates unchanged in the near term, alongside the possibility of a more dovish stance ahead, are also contributing to the downside pressure on the USD.

Investors now turn their attention to upcoming monetary policy decisions this week. The Fed is expected to hold rates steady on Wednesday, while the European Central Bank (ECB) is likely to follow suit on Thursday, although it may signal future tightening amid persistent inflationary pressures, particularly driven by energy prices. According to ING, a firm ECB message regarding a potential rate hike could help keep the Euro supported in the short term.

Overall, despite weakening European fundamentals, EUR/USD dynamics remain primarily driven by external factors, particularly US Dollar movements and geopolitical developments.

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.20%-0.19%-0.16%-0.44%-0.51%-0.56%-0.10%
EUR0.20%0.02%0.04%-0.24%-0.27%-0.34%0.10%
GBP0.19%-0.02%0.02%-0.28%-0.32%-0.39%0.08%
JPY0.16%-0.04%-0.02%-0.28%-0.35%-0.41%0.09%
CAD0.44%0.24%0.28%0.28%-0.06%-0.12%0.34%
AUD0.51%0.27%0.32%0.35%0.06%-0.04%0.43%
NZD0.56%0.34%0.39%0.41%0.12%0.04%0.45%
CHF0.10%-0.10%-0.08%-0.09%-0.34%-0.43%-0.45%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

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USD/CHF Price Forecast: Remains below 0.7850 near moving averages

  • USD/CHF may test the descending channel’s lower boundary near 0.7690.
  • The 14-day Relative Strength Index near 47 signals weak momentum, not a clear oversold condition.
  • The initial resistance lies at the nine-day EMA of 0.7843.

USD/CHF remains subdued for the second successive day, trading around 0.7840 during European hours on Monday. The technical analysis of the daily chart indicates the pair is positioned within the descending channel pattern, signaling an ongoing bearish bias.

The USD/CHF pair keeps a bearish near-term bias as the spot price holds beneath both the nine-day and 50-day Exponential Moving Averages, respectively. The short-term EMA flattening just above the price and the longer EMA capping the pair hint at persistent overhead supply, while the 14-day Relative Strength Index (RSI) around 47 reflects subdued momentum rather than a decisive oversold condition.

The USD/CHF pair may navigate the region around the lower boundary of the descending channel around 0.7690. A successful break below the channel would reinforce the bearish bias and put downward pressure on the pair to test 0.7604, the lowest since August 2011, recorded in January.

On the upside, the immediate barrier lies at the nine-day EMA of 0.7843, followed by the 50-day EMA at 0.7862. A break above these EMAs would improve price momentum and support the USD/CHF pair to test the upper boundary of the descending channel around 0.7949. A sustained break above the channel would cause the emergence of the bullish bias and lead the pair to explore the region around the 10-month high of 0.8171, reached in August 2025.

USD/CHF: Daily Chart

(The technical analysis of this story was written with the help of an AI tool.)

Swiss Franc Price Today

The table below shows the percentage change of Swiss Franc (CHF) against listed major currencies today. Swiss Franc was the strongest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.24%-0.18%-0.14%-0.42%-0.54%-0.54%-0.18%
EUR0.24%0.07%0.11%-0.18%-0.26%-0.29%0.07%
GBP0.18%-0.07%0.02%-0.26%-0.36%-0.38%-0.01%
JPY0.14%-0.11%-0.02%-0.26%-0.39%-0.42%0.00%
CAD0.42%0.18%0.26%0.26%-0.12%-0.15%0.24%
AUD0.54%0.26%0.36%0.39%0.12%-0.01%0.36%
NZD0.54%0.29%0.38%0.42%0.15%0.01%0.37%
CHF0.18%-0.07%0.00%-0.00%-0.24%-0.36%-0.37%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Swiss Franc from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CHF (base)/USD (quote).