Forex Today: US Dollar stays resilient as Hormuz tensions keep markets on edge
Here is what you need to know for Thursday, April 23:The US Dollar Index (DXY) held firm near the 98.60 area as investors continued to favor the Greenback amid lingering uncertainty around the US-Iran conflict. While President Donald Trump extended the ceasefire, Iran’s seizure of two ships in the Strait of Hormuz kept traders cautious and reinforced the market’s defensive tone.
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
USD EUR GBP JPY CAD AUD NZD CHF USD 0.29% -0.00% 0.05% 0.01% -0.10% -0.22% 0.45% EUR -0.29% -0.28% -0.22% -0.26% -0.39% -0.52% 0.17% GBP 0.00% 0.28% 0.06% 0.03% -0.09% -0.23% 0.45% JPY -0.05% 0.22% -0.06% -0.03% -0.13% -0.27% 0.38% CAD -0.01% 0.26% -0.03% 0.03% -0.11% -0.22% 0.43% AUD 0.10% 0.39% 0.09% 0.13% 0.11% -0.14% 0.52% NZD 0.22% 0.52% 0.23% 0.27% 0.22% 0.14% 0.66% CHF -0.45% -0.17% -0.45% -0.38% -0.43% -0.52% -0.66%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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD drifted lower toward the 1.1710 zone as the pair remained pressured by the cautious global backdrop. The Euro also faced some headwinds from Europe’s softer risk mood, with regional equities falling again and higher Oil adding to inflation concerns across the block.
GBP/USD trades muted around 1.3500, showing relative resilience, but gains were capped after fresh United Kingdom (UK) annual Consumer Price Index (CPI) rose to 3.3% in March from 3.0% in February, while services inflation climbed to 4.5%, reinforcing concerns that the Bank of England (BoE) may need to stay cautious even as growth risks linger.
USD/JPY remained steady near the 159.50 level, with the Japanese Yen (JPY) holding its own earlier in the day and even modestly outperforming the Greenback as US yields softened and some safe-haven demand returned. Even though the broader US Dollar stayed supported, the decline in benchmark Treasury yields limited upside in the pair.
AUD/USD remained sensitive but gained some footing near 0.7160 with the broader risk backdrop still unstable. The ceasefire extension offered some relief to equities, but the renewed Hormuz disruption and jump in crude prices kept commodity-linked currencies from building stronger upside momentum.
West Texas Intermediate (WTI) Oil surged back above $93.10 per barrel, as traders reacted to fresh threats to shipping flows through Hormuz. The move in energy remained one of the session’s main macro drivers, keeping inflation fears alive.
Gold rebounded toward $4,735 per troy ounce, supported by lower long-dated US Treasury yields and renewed caution.
What’s next in the docket:Thursday, April 23:
Eurozone ECB Non-Monetary Policy MeetingFrance HCOB PMIs April PrelGermany HCOB PMIs April PrelEurozone HCOB PMIs April PrelUnited Kingdom S&P Global PMIs April PrelUnited States Initial Jobless ClaimsUnited States S&P Global PMIs April PrelUnited States New Home Sales MarchUnited Kingdom GfK Consumer Confidence AprilJapan Inflation Data MarchFriday, April 24:
United Kingdom Retail Sales MarchGermany IFO Survey AprilCanada Retail Sales FebruaryUnited States Michigan Data AprilUnited States Inflation Expectations AprilWTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
What factors drive the price of WTI Oil?Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
How does inventory data impact the price of WTI OilThe weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
How does OPEC influence the price of WTI Oil?OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.