The Morning Update

The USD, equities and treasury yield inched higher while oil remains unchanged as we start the day. With little in the form of economic data coming from the USA today, the markets are focusing on the rise in geopolitical risk.

In other news.  Fresh off his North Korean trip, Putin is in Vietnam calling for a strengthening of strategic partnership. The US will send Taiwan $360 million in arms and support equipment as they face increasingly aggressive maneuvers by China. Blinken expresses solidarity with Philippines over China's maritime actions. Israel pounds Gaza camps as it deepens its invasion of Rafah. Head of Lebanon’s Hezbollah threatens Israel and Cyprus.

In currency news. The Swiss National bank lowered interest rate by 25bps after a similar cut in March. Japan top currency diplomat declares no limit to intervention resources. China's yuan eases to 7-month low after much weaker central bank guidance. The ZAR edges lower, focus on president's cabinet picks. Malaysia also announced its plans tojoin the BRICS trading federation before a meeting between its Prime Minister Anwar Ibrahim and Premier Li of China. In May, Thailand also announced plans to join the BRICS. The USD is gathering strength this morning rallying 0.05% against the CNY, 0.20% against the JPY, 0.27% against the THB 0.25%. The AUD and NZD fared a little better down 0.07% against the greenback. In the trading currencies, the US rallied 0.79% against the ZAR and remained flat against the MXN.

In commodity markets. Oil futures are steady, hovering slightly below seven-week highs as the market awaited U.S.inventory data. Gold hits two-week high on the back of Fed rate cut bets and the escalation of geopolitical risk. Silver recovers rallying 1.5%. Copper up 0.5% on China's easing monetary policy stance, demand rebound and supply concerns. Wheat futures extend losses as crop forecast eases supply fears. Corn and soybean futures also dipped amid easing concerns over a heatwave.

Current level USD Index               105.466           Up 0.20%

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The USD/CAD trades with mild gains snapping the four-day losingstreak The modest recovery of the USD might be limited amid reduced bets of the Fed rate cut this year.

Current level USD/CAD               1.3712            Up 0.07%

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The EUR/CAD remains under pressure as the markets are testing the monthly lows.  

Current level EUR/CAD                1.4712           Down 0.08%

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EUR/USD weakens as Eurozone political uncertainty poses downside risks for Euro.

Current level EUR/USD                1.0725           Down 0.16%

The GBP/EUR remains quiet as market awaits the BoE rate decision.

Current level GBP/EUR     1.1840(0.8444)        Up 0.05%

The GBP/USD is off slightly as marketawaits the BoE’s interest rate decision.

Current levelGBP/USD                1.2703           Down 0.13%

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