Risk-On Reversal, Dollar Loses War Premium
The US dollar moved nearly flat on Friday (April 10), but was on track for its biggest weekly decline since January, as investors dumped safe-haven assets amid optimism that oil shipments could recover if the Gulf ceasefire holds. The safe-haven position, which had strengthened sharply in March, has begun to reverse since the ceasefire agreement was reached on Tuesday, although the market still views its implementation as fragile.
The euro strengthened 1.4% over the week to US$1.1687, while the pound sterling rose 1.7% since Monday to US$1.3418. The Australian and New Zealand dollars—which are sensitive to risk appetite—posted weekly gains of nearly 3% against the US dollar, with the Aussie trading just above US$0.70. The dollar index (DXY) rose less than 0.1% on the day, but is still down 1.3% for the week.
However, signs of a recovery in flows in the Strait of Hormuz remain minimal. In the first 24 hours of the ceasefire, only one oil product tanker and five dry cargo ships passed through, far below the pre-war level of about 140 ships per day. Market direction on Friday is expected to be more influenced by the outcome of the weekend peace talks in Islamabad than the US inflation (CPI) release later that day.
The yen recovered slightly from its lowest level, but remained "less desirable," weakening to 159.27 per dollar. The Chinese yuan headed for its biggest weekly gain in 15 months and traded at its strongest level since 2023, supported by data showing factory-gate prices rising for the first time in three years—an indication that deflationary pressures are easing.
Source: Newsmaker.id
