JMP G10 FX

The market's increasingly constructive view on the Iran situation continues to be the dominant driver in G10 FX. Risk assets are performing well, and as long as there is no renewed military escalation, the USD is likely to remain subdued. The main question is whether markets are becoming too complacent, but for now, the Middle East remains the overriding macro theme and other drivers matter less unless there is clear evidence of a broader hit to global growth.

EUR

The euro has rallied quickly but is struggling to sustain gains above 1.18, where resistance is starting to build. With the ECB leaning away from any April tightening signal, the euro is increasingly being used as a funding currency for higher-beta longs, which may limit near-term upside. Positioning has been reduced somewhat after taking profit into the move, with room to add again either on a clean break above 1.1830 or on a dip. There is still a case for further upside if the market is wrong-footed, but for now a more tactical stance seems warranted.

GBP

The pound has remained notably resilient. UK GDP surprised to the upside and prior data were revised higher, prompting some reduction in EURGBP exposure. That said, the broader medium-term concern remains that the UK could drift toward a more stagflationary backdrop given elevated energy prices and yields. Bailey’s comments that the BoE would not rush to respond to the energy shock had limited impact on market pricing. Flow-wise, hedge funds were modest buyers of sterling after several days of selling, while systematic accounts also extended their recent buying trend.

JPY

The yen remains stuck in a familiar range, with USDJPY still hovering around 158–160 despite lower April BoJ pricing and stronger risk sentiment. There is little conviction in either direction at present, and the currency lacks a clear catalyst. With no meaningful flows of note, staying neutral still looks sensible.

CHF

The Swiss franc continues to send mixed signals. On one hand, a weaker dollar and any broader “sell US assets” theme should support CHF. On the other, stronger risk sentiment argues for a higher EURCHF, while excessive franc strength could trigger louder resistance from the SNB. With these opposing forces offsetting one another, conviction remains low and a sidelined stance is understandable.

AUD / NZD

The Australian dollar continues to look well supported. Employment data were broadly steady, with the unemployment rate unchanged at 4.3% and particularly solid full-time job growth, even if headline employment slightly undershot expectations. The bigger focus was the rise in consumer inflation expectations to 5.9%, which may concern the RBA given the risk of inflation expectations becoming less anchored.

Even so, the macro backdrop remains supportive for AUD. Option demand has picked up on the topside, and if the expected two-week ceasefire extension materialises, AUDUSD should continue to find support on dips. There is also a constructive tactical view on EURAUD downside, helped by both relative cyclical support for Australia and softer sentiment toward the euro as a funding currency. A sustained move back above 1.6550 in EURAUD would weaken that view, while a move back toward the year’s lows near 1.6130/40 remains the broader target.

CAD

The Canadian dollar is broadly tracking the wider risk backdrop, with US equities making new highs and the DXY still grinding lower. Real money accounts continue to show demand for CAD, while hedge funds have been sellers, leaving the currency trading roughly in line with sentiment rather than showing clear independent momentum. With little on the domestic data calendar, CAD still looks likely to be a modest underperformer on the crosses.