Jun 13, 2025 (Baystreet.ca via COMTEX) --
- Oil soars, stocks sink, after Israel bombs Tehran
- Trump talking about higher auto tariffs.
- US dollar still on the defensive but grinds out small gains overnight
USDCAD: open 1.3627, overnight range 1.3592-1.3652, close 1.3603, WTI 73.73, Gold 3424.48
The Canadian dollar extended Thursday's gains in Asia until the news of Israel's attack on Iran sparked a rusk for risk aversion trades.
Reports indicate that around 200 Israeli jets carried out strikes on 100 strategic targets, including the Natanz nuclear facility, which was reportedly leveled. Among the casualties were Iran's Revolutionary Guard commander, the head of the Armed Forces, and the Emergency Command chief. Tehran's fury was palpable, but the regime's options for retaliation were scant after Israel spent the past two years systematically dismantling Iran's regional proxies.
Surging oil prices helped the Canadian dollar mitigate its losses. West Texas Intermediate (WTI) surged more than 16% from Thursday's low to the overnight peak before profit-taking and news that Israel spared Iran's oil infrastructure drove WTI to 73.17 in NY trading.
Today's Canadian Manufacturing and Wholesale Sales data and the US Michigan Consumer Sentiment report may play second fiddle to geopolitical developments.
Global equity markets reacted with a bout of risk aversion. Hong Kong's Hang Seng dropped 0.59%, Japan's Topix shed 0.95%, and Australia's ASX 200 lost 0.21%. European bourses followed suit with the DAX down 1.25%, the CAC 40 slipping 0.90%, and the FTSE 100 off 0.28%. S&P 500 futures were down 0.87% as of 8:00 am EDT. The US 10-year yield fluctuated between 4.31% and 4.37%, while gold surged from 3380.68 to 3444.53 before consolidating near its high.
EURUSD traded in a 1.1512-1.1614 range, erasing much of the previous day's gains in response to news of Israel's operation in Iran. The primary driver wasn't safe-haven demand for dollars but rather the 16% spike in oil prices, which weighed on the euro. Despite the pullback, the uptrend that began in late February remains intact while prices hold above 1.1390, bolstered by softer US data that supports rate cut expectations for September.
GBPUSD ranged between 1.3522 and 1.3632, giving back most of Thursday's gains which had followed weak US jobless claims and PPI results. However, the broader uptrend remains in place, supported by expectations that the Bank of England will leave its policy rate unchanged at 4.25% at next week's meeting.
USDJPY moved within a 142.80-144.16 band. A brief dip in Asia on safe-haven yen buying reversed as oil prices rocketed higher, reigniting demand for USDJPY. The Bank of Japan is widely expected to keep rates on hold at its June 17 meeting, reinforcing the policy divergence narrative.
AUDUSD dropped steadily in a 0.6474-0.6534 range. Sentiment turned sour following the Israeli strikes and the sharp rise in oil, which hit risk-sensitive currencies. The downside pressure was tempered by ongoing optimism around US-China trade relations and a view that the RBA will keep rates steady in July.
COMTEX_466340348/2559/2025-06-13T10:27:48
