Gold prices edge higher on raised Fed rate cut hopes
Investing.com -- Oil prices jumped following escalating tensions between Israel and Iran that began last Friday. Brent crude prices rose approximately $5 higher than before Israel’s strikes and stand about 25% above the 2025 lows seen in April, according to UBS analysis.
The Norwegian krone (NOK) and Canadian dollar (CAD) have emerged as the best-performing G10 currencies during this period, reflecting these countries’ connections to oil supply. Energy-price-sensitive currencies like the British pound (GBP) and Japanese yen (JPY) are underperforming in the current market environment.
The U.S. dollar (USD) experienced only a brief rally Friday after Israel’s strikes began before quickly surrendering those gains. UBS notes this tepid performance suggests USD short positioning may not be as substantial as believed, structural USD selling against European currencies remains strong, and the dollar’s safe-haven status appears increasingly diminished.
Central bank meetings dominate this week’s G10 market highlights. The Bank of Japan’s decision Monday had minimal impact on foreign exchange markets, with UBS expecting similar limited effects from upcoming Federal Reserve and Bank of England rate decisions.
UBS analysts anticipate potential Swiss franc (CHF) strengthening if the Swiss National Bank implements a 25-basis-point cut, with pressure likely coming from domestic investors shifting away from U.S. assets rather than tactical CHF positioning.
The firm continues to recommend buying dips in EUR/CHF below 0.9300 while maintaining a bearish outlook on USD/CHF.
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