The US Dollar Index (DXY) moved back towards 100.00 after Donald Trump said the US would intensify strikes on Iran over the next two to three weeks. Oil jumped, shares fell, and markets turned to geopolitics ahead of Friday\u2019s US Nonfarm Payrolls report.<\/p>\n
US weekly Initial Jobless Claims fell to 202K from 211K, below the 212K forecast. This data point came alongside the broader move into the US Dollar.<\/p>\n
EUR\/USD slipped towards 1.1540 as the stronger Dollar drove trading. GBP\/USD fell towards 1.3230, with added focus on the UK\u2019s exposure to higher imported energy costs.<\/p>\n
A Bank of England survey showed UK firms expect to raise prices by 3.7% over the next year, the biggest rise in nearly two years. USD\/JPY rose towards 159.60, with the 160.00 area still linked to intervention concerns.<\/p>\n
AUD\/USD eased to about 0.6910 in weaker risk mood. WTI Oil rose above $111.00 and briefly neared $114.00, while Gold fell towards $4,661.<\/p>\n
Friday\u2019s diary includes US March Average Hourly Earnings, Nonfarm Payrolls, Unemployment Rate, wider labour market data, and the S&P Global Composite PMI.<\/p>\n
We are seeing a very different market setup for oil traders compared to what we saw this time last year. In April 2025, geopolitical tensions sent WTI crude prices soaring above $111 a barrel, creating extreme volatility. Today, with WTI trading in a more stable range around $85, the geopolitical risk premium has faded, suggesting derivative strategies should focus more on supply and demand fundamentals from OPEC+ and inventory data.<\/p>\n
The US Dollar Index (DXY) is also telling a different story, which should inform our currency positions. Last year, the DXY was pushed towards the 100.00 mark by a flight to safety. As of April 2026, the DXY is trading substantially higher at around 104.50, indicating its strength is now rooted in persistent interest rate differentials rather than just short-term fear.<\/p>\n
This strength comes even as the US labor market shows signs of cooling compared to the solid footing we saw in 2025. Last year’s weekly jobless claims were a very low 202,000, but recent weekly figures have been trending higher, averaging 218,000 throughout March 2026. The Nonfarm Payrolls report for March also showed job growth slowing to 195,000, a notable cooling from the stronger numbers seen in early 2025.<\/p>\n
For foreign exchange traders, this has meant the pressure on other major currencies has become more chronic. Last year we watched GBP\/USD fall towards 1.3230 on energy cost fears, but today it sits much lower near 1.2580. Similarly, EUR\/USD has declined from the 1.1540 zone in April 2025 to around 1.0850 now, showing the dollar\u2019s fundamental advantages have widened over the past twelve months.<\/p>\n
We must also adjust our view on the Japanese Yen, which has changed dramatically since last year. In April 2025, the market was on high alert for intervention as USD\/JPY pushed toward 160.00. Now, with the pair trading closer to 151.00, it seems the Bank of Japan\u2019s firmer stance has had a lasting impact, reducing the viability of simply shorting the yen on rate differentials.<\/p>\n
Gold\u2019s behavior signals a key shift in market focus away from the dynamics of 2025. Back then, bullion fell as the strong dollar dominated sentiment, but today gold is holding firm near a record $2,350 per ounce. This suggests traders are now prioritizing gold as a hedge against a potential economic slowdown and sticky inflation, a different role than the one it played last year.<\/p>\n
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