The Euro declined in the European market on Thursday against a basket of global currencies, deepening its losses for the third consecutive day against the U.S. dollar. It reached its lowest level in ten days as investors focused on purchasing the American currency as the preferred alternative investment amid escalating tensions between the United States and Iran in the Strait of Hormuz, with both sides exchanging control over ships and oil tankers.

The current rise in global oil prices increases indications of growing inflationary pressures on monetary policymakers at the European Central Bank (ECB) and boosts the probability of European interest rate hikes this year. To re-price these probabilities, traders await the release of key European sector data for April later today.

Price Overview

- Euro Exchange Rate Today: The Euro fell against the dollar by more than 0.1% to ($1.1692), the lowest since April 13, from today’s opening price of ($1.1705), while reaching a high of ($1.1714).

- The Euro ended Wednesday's trading down 0.3% against the dollar, its second consecutive daily loss, due to escalating geopolitical tensions in the Middle East.

The U.S. Dollar

The dollar index rose by more than 0.1% on Thursday, extending its gains for the third consecutive session and recording its highest level in over a week. This reflects the continued rise of the American currency against a basket of global currencies.

This ascent comes as investors focus on buying the U.S. dollar as a safe haven, as the United States and Iran remain at odds over the ceasefire, the blockade, nuclear files, and control of the Strait.

These disputes keep the strategic waterway effectively closed and threaten an energy sector shock that could damage global economies.

Skye Masters, head of markets research at National Australia Bank, stated: "Despite Trump's extension of the ceasefire, tensions remain high with Iran's refusal to reopen the Strait of Hormuz and the continued U.S. naval blockade, increasing the risk of prolonged supply disruptions."

Masters added that extreme economic and trade risks are undervalued, and inflationary pressures will persist until the end of the year.

Iranian War Updates

- The United States intercepts three Iranian oil tankers in Asian waters.

- Iran seizes two cargo ships in the Strait of Hormuz on Wednesday.

- Navigation in the Strait of Hormuz is nearly at a standstill.

- The United Kingdom announced that two vessels were attacked in the Strait of Hormuz.

- Trump hints at the possibility of a second round of negotiations in Pakistan tomorrow, Friday.

- Iranian Parliament Speaker and chief negotiator Mohammad Bagher Ghalibaf stated that a full ceasefire would only be logical if the blockade is lifted.

Global Oil Prices

Global oil prices rose by more than 4% on Thursday, extending gains for the fourth consecutive day and reaching a two-week high. This comes amid mounting fears of energy supply disruptions from the Arabian Gulf region as the Strait of Hormuz remains closed to oil tankers.

Undoubtedly, the rise in global oil prices renews fears of accelerating inflation, which may push global central banks to raise interest rates in the near term—a sharp shift from pre-war expectations of cutting or holding rates steady for a long period.

European Interest Rates

- With the rise in global oil prices, money market pricing for the probability of the ECB raising European interest rates by 25 basis points in April increased from 20% to 30%.

- To re-price these probabilities, investors await the release of key sector data for the European economy later today.

- ECB President Christine Lagarde stated: The bank is prepared to raise interest rates even if the expected rise in inflation is short-term.

- Sources told Reuters that the ECB is likely to begin discussing interest rate hikes during this month's meeting.

The Japanese yen declined in the Asian market on Thursday against a basket of major and minor currencies, deepening its losses for the fourth consecutive day against the U.S. dollar. It reached its lowest level in nearly two weeks as investors focused on buying the American currency as the preferred alternative investment amid escalating tensions between the United States and Iran in the Strait of Hormuz, where both sides have exchanged control over ships and oil tankers.

Despite the current rise in global oil prices, the probability of the Bank of Japan (BoJ) raising interest rates during its April meeting remains weak. Most speculation suggests the bank will abandon its hawkish stance due to risks associated with the repercussions of the Iranian war.

Price Overview

- Japanese Yen Exchange Rate Today: The dollar rose against the yen by 0.15% to (159.68¥), the highest since April 13, from today’s opening price of (159.44¥), and recorded a low of (159.30¥).

- The yen ended Wednesday's trading down by 0.1% against the dollar, its third consecutive daily loss, due to escalating tensions between the United States and Iran.

The U.S. Dollar

The dollar index rose by more than 0.1% on Thursday, extending its gains for the third consecutive session and reaching its highest level in over a week. This reflects the continued rise of the American currency against a basket of global currencies.

This ascent comes as investors focus on buying the U.S. dollar as a safe haven, as the United States and Iran remain at odds over the ceasefire, the blockade, nuclear files, and control of the Strait.

These disputes keep the strategic waterway effectively closed and threaten an energy sector shock that could damage global economies.

Skye Masters, head of markets research at National Australia Bank, stated: "Despite Trump's extension of the ceasefire, tensions remain high with Iran's refusal to reopen the Strait of Hormuz and the continued U.S. naval blockade, increasing the risk of prolonged supply disruptions."

Masters added that extreme economic and trade risks are undervalued, and inflationary pressures will persist until the end of the year.

Iranian War Updates

- The United States intercepts three Iranian oil tankers in Asian waters.

- Iran seizes two cargo ships in the Strait of Hormuz on Wednesday.

- Navigation in the Strait of Hormuz is nearly at a standstill.

- The United Kingdom announced that two vessels were attacked in the Strait of Hormuz.

- Trump hints at the possibility of a second round of negotiations in Pakistan tomorrow, Friday.

- Iranian Parliament Speaker and chief negotiator Mohammad Bagher Ghalibaf stated that a full ceasefire would only be logical if the blockade is lifted.

Global Oil Prices

Global oil prices rose by more than 4% on Thursday, extending gains for the fourth consecutive day and reaching a two-week high. This comes amid mounting fears of energy supply disruptions from the Arabian Gulf region as the Strait of Hormuz remains closed to oil tankers.

Undoubtedly, the rise in global oil prices renews fears of accelerating inflation, which may push global central banks to raise interest rates in the near term—a sharp shift from pre-war expectations of cutting or holding rates steady for a long period.

Japanese Interest Rates

- The Bank of Japan is expected to abandon its hawkish stance during its meeting next week, despite keeping interest rates steady.

- Governor Kazuo Ueda has recently refrained from pledging to raise interest rates in April, given the war's impact on economic projections.

- Market pricing for the probability of the Bank of Japan raising interest rates by a quarter percentage point in April is currently stable around 10%.

- To re-price these probabilities, investors await further data on inflation, unemployment, and wages in Japan.

The Canadian dollar stabilized near a six-week high against its U.S. counterpart on Wednesday, supported by rising oil prices, while investors await signs of diplomatic progress toward ending the war in the Middle East.

The Canadian currency, known as the "loonie," was traded largely unchanged at the 1.3660 level against the U.S. dollar, or the equivalent of 73.21 U.S. cents. On Tuesday, it had recorded its strongest intraday level since March 13 at 1.3629.

Analysts at Monex Europe indicated that recent market movements reflect investors focusing more on global risk appetite rather than domestic economic factors.

This came amid escalating tensions after Iran seized two ships in the Strait of Hormuz, strengthening its control over this vital maritime corridor, following President Donald Trump’s suspension of attacks without signs of resuming peace talks.

Analysts explained that if the ceasefire extension continues and oil prices stabilize, the Canadian dollar could see a recovery toward its recent highs; however, they expected trading to remain volatile in the absence of tangible diplomatic progress.

Conversely, the U.S. dollar, which serves as a safe haven, rose against a basket of major currencies, while oil prices climbed by approximately 4.2% to reach $93.42 per barrel.

Oil is one of Canada's most significant exports, but these exports have faced pressure over the past year due to high U.S. tariffs on key sectors such as automotive, steel, and aluminum. The United States-Mexico-Canada Agreement (USMCA) is scheduled for review by July 1.

In this context, Canadian Prime Minister Mark Carney emphasized that his country will not allow the United States to dictate terms during the agreement review.

Regarding domestic data, figures showed that new home prices declined by 0.2% in March compared to February, while investors await the release of February retail sales data on Friday, with expectations of a 0.9% month-on-month increase.

Canadian government bond yields were mixed across various maturities, with the 10-year bond yield falling by less than one basis point to reach 3.478%.

Copper prices rose on Wednesday after U.S. President Donald Trump announced the extension of the ceasefire with Iran, boosting market risk appetite, although continued uncertainty regarding the Middle East conflict limited the metal's gains.

The benchmark three-month copper price on the London Metal Exchange (LME) rose by 0.3% to reach $13,270 per metric ton during official trading.

The price spread between copper contracts on the U.S. Comex exchange and their LME counterparts—a prominent feature of the copper market in 2025—re-emerged this month, encouraging shipments toward the United States.

Kostas Bintas, global head of metals at Mercuria, stated that copper flows to the United States will continue as long as this price differential persists, likely until July, when a decision regarding potential tariffs on the metal is expected.

Data showed that copper inventories in Comex warehouses have risen by 2% since mid-April to reach 544,887 tons, approaching the record high of 545,867 tons recorded in February. In contrast, LME inventories stood at 395,575 tons following recent declines in its Asian warehouses.

During the Financial Times Global Commodities Summit in Lausanne, Switzerland, participants expressed cautious optimism regarding long-term copper prospects while warning of short-term demand risks should the Middle East conflict persist for an extended period.

In other metal markets, aluminum is already experiencing a supply shock described as a "black swan" due to war-related disruptions, which could lead to significant supply shortages this year, according to a senior metals analyst at Mercuria.

LME aluminum rose by 1.3% to $3,604.5 per ton, after having recorded a four-year high of $3,672 on April 16.

Nickel also climbed by 0.8% to $18,370 per ton, supported by expectations of a global market deficit this year. Zinc rose 0.7% to $3,467, while lead declined 0.6% to $1,951, and tin increased by 0.5% to $50,175.