Global sentiment weakens as US seizes Iranian ship
Global markets opened lower on Monday as investors reacted to renewed tensions between the US and Iran.
US President Donald Trump said the US had opened fire on an Iranian-flagged vessel over the weekend, with the ship now seized by US forces. Iranian officials responded by threatening further restrictions on passage through the Strait of Hormuz and confirmed they would not attend negotiations in Islamabad this week.
Crude oil spiked in early trading, with both WTI and Brent contracts jumping more than 7.0%.
AUD/USD opened Monday down 0.7%, reversing sharply from the four-year highs reached on Friday. The sharp reversal above 0.7200 could be seen a negative sign with the market unable to sustain trading at new highs.
NZD/USD fell 0.4%.
In Asian trading, the US dollar was mostly stronger. USD/CNH rose 0.2%, while USD/SGD climbed 0.3%.
The greenback underperformed slightly against the yen, with USD/JPY up a modest 0.1%.
Yen pressure builds as Japan stays cautious
Bank of Japan Governor Kazuo Ueda said risks are emerging from both sides: prices could rise faster than expected, while economic growth may lose momentum. Policymakers also highlighted the Middle East as a major source of uncertainty. With so many unknowns, the central bank is opting for patience and holding off on any decisive policy action.
Japan’s top currency official, Atsushi Mimura, added that authorities are working closely with the United States on currency matters.
USD/JPY has now fallen around 0.7% from its late-March high near 160.46 and is hovering around 159.00.
Initial support sits at the 21-day EMA near 159.02, followed by the 50-day EMA around 158.15.
The pair remains within an ascending price channel, suggesting scope for a retest of resistance at 160.00, followed by 162.00.
Elsewhere, yen weakness is hard to ignore. AUD/JPY hit its strongest level in 36 years last week, while SGD/JPY pushed to a new all-time high.
Key inflation in focus this week, with NZ standout
The week ahead is packed with major inflation releases that will shape FX sentiment across G10 and Asia.
Canada leads off Monday with March CPI (consensus 2.4% y/y), while China’s PBoC is expected to leave both the one- and five-year Loan Prime Rates unchanged. Early Tuesday, New Zealand’s Q1 CPI will be closely watched as markets reassess RBNZ policy expectations following the prior 3.1% annual print.
Attention turns to the UK on Wednesday with March CPI, a critical release as markets weigh the Bank of England’s next move. Singapore CPI follows on Thursday alongside a heavy slate of flash PMIs.
Eurozone, UK, and US PMI data will provide fresh insight into business activity, with the Eurozone composite last printed at 50.7 and the UK at 50.3. US retail sales on Tuesday and US PMIs on Thursday will add further colour on US economic momentum.
Japan’s March CPI on Friday is key for the yen, while Australian and Japanese PMIs on Thursday will help gauge regional growth. With no major holidays, liquidity should remain solid, though inflation surprises and central bank signals may drive outsized moves.
Aussie gives up its four-year highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 20 – 25 April
All times AEST
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
