AUD/USD pair grows by 0.29% as Middle-East tensions continue to flare

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Major currency pairs in the market are holding steady as Middle-East tensions continue to dictate price changes in stock indexes and commodities. Major U.S. pairs are posting small but stable gains in the market by the following amounts, according to CNBC data:

Common USD pairs 

• EUR/USD: +0.1462%
• USD/JPY: +0.04%
• GBP/USD: +0.13%
• AUD/USD: +0.34%
• USD/CAD: 0.01%

While the U.S. currency is not gaining in all of the pairs as a dominant currency, the upward trend among major currency pairs suggests that the currencies of developed economies are holding strong in the current market. 

Oil prices have now cooled from multi-month highs, but the trend of inflation is still present in the global economy with higher fuel pricing still kicking in months from the price hikes. 

Oil prices were as follows according to oilprice.com

• WTI crude: $91.32
• Brent crude: $94.07
• Murban crude: $94.43

As stock indexes continue to fluctuate, the market may continue to price in Middle East tensions. However certain asset classes such as tech-sector ETFs and select major currency pairs have recorded gains in previous trading sessions.

A full resumption of economic trade through the Strait of Hormuz depends on an agreement on a mutual set of conditions. As of now, the market is pricing each and every move of the negotiations between the U.S. and Iran. 

Summary

In the view of SGFX research desk, with a cooling of oil prices and resilient currency pairs, the market is retaining some growth and stability in the current economy but a stronger outlook for stocks would depend on a full and clear resolution of the current Middle-East conflict and a reopening of the Strait of Hormuz unless alternative routes offering similar capacity for trade is unlocked. 

Research references:

• Bloomberg data
• CNBC data
• oilprice.com data

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