17th April 2026 - Holding Pattern

Forex

The initial euphoria of the ceasefire and Trump's 'over soon' comments wore off a little yesterday, with currency markets mixed in anticipation of an extension of the 2-week ceasefire due to end on the 22nd of Apr. Markets are in a wait-and-see pattern for the outcome of the talks, which should be a good strategy to follow over what could be a pivotal weekend.

The USD recovered some of its losses on the week, but remains sensitive to news coming from Iran and the Middle East. It is still sitting below the key 100 level on the DXY. Unless we see negative news from Iran, I would expect to see long-term movement short as the safe-haven trades are unwound.

Strong GDP numbers from the UK should have given a boost to the GBP, with a beat of 0.5% against an expected 0.1%, a strong overperformance. There was a temporary reaction, but the IMF projection of just 0.8% growth over the year, coupled with the geopolitical backdrop, meant overall a less encouraging picture for the Pound.

The Yen suffered again yesterday, with reduced expectations of a Bank of Japan rate hike contributing to a fall against almost all other currencies. The USD/JPY is currently sitting in the mid-159s; a move up to 160.000 could lead to strong risks of BOJ intervention and violent moves down. Back in 2024, the last time we were at this level, the BOJ intervened and sent USD/JPY tumbling close to 14%. It would not be a surprise to see this happen again.

The CHF and commodity currencies (AUD, CAD, NZD) had mixed days. The CHF and NZD were relatively flat, while the AUD and CAD were positive overall. AUD benefited from China's strong GDP release yesterday, while CAD was still benefiting from higher oil prices still hovering around the key $90 per barrel level. Again, this could all change depending on the outcome of the Iran negotiations; changes in the combination of market sentiment and commodity prices could lead to an interesting couple of days for the lesser-traded major currencies.

Indices

The S&P and NASDAQ closed at all-time highs again yesterday, a slightly less exaggerated move compared to previous days but still a green day nonetheless. The market optimism is still there and could continue to push the markets higher, but I feel the excitement may have pushed the markets a little too high, and any less than positive news could lead to a correction. As with everything today, the best course of action is to wait and see.

The NIKKEI fell a little yesterday on the back of Yen weakness, but is still overall following the US indices' lead in showing strong growth and looks a good bet to break record highs next week if optimism continues. The FTSE has stalled a little over the past week, possibly highlighting the weakness of the UK economy compared to the US.

Precious Metals

Gold and Silver remained in a holding pattern yesterday, showing no significant moves either way. Gold is still caught between opposing forces, optimism reducing safe-haven demand against sticky inflation and higher commodity prices. Silver is caught in the same situation; again, as mentioned, the best course of action is to see what happens over the weekend.

Today's Market Drivers

There are no scheduled economic releases today, so the focus will be solely on comments from Trump on Iran and updates on the broader situation in the Middle East. Going into the weekend, there is the potential for significant events to unfold while the market is closed; we could see significant gaps in markets if there are any large updates. The overriding theme is to wait and see, reduce risk over the weekend, and hope for the best!