Currency markets are experiencing heightened volatility as oil prices rise and geopolitical uncertainties persist. According to OCBC's Christopher Wong, the Japanese Yen (JPY) has seen choppy trading against the US Dollar (USD), with suspected Ministry of Finance (MoF) intervention capping USD/JPY gains near the 160 level. The pair was last seen at 156.70, with support at 155.40 and resistance up to 158.70. Wong notes that while intervention risk tempers the upside for USD/JPY, the fundamental backdrop remains not decisively JPY-positive due to higher oil prices acting as a drag. Bearish daily momentum persists, but two-way trading is expected to continue, driven by oil price swings [1].
Meanwhile, ING's Chris Turner highlights that the US Dollar Index (DXY) has started the week slightly stronger, supported by fading hopes for a Middle East ceasefire and a jump in oil prices. The upcoming US April Consumer Price Index (CPI) release is seen as a key event, with expectations for headline inflation to rise to 3.7% year-on-year (from 3.3%) and core inflation to 2.7% (from 2.6%). Turner suggests that the Federal Reserve is likely to remain cautious, and the DXY is expected to remain in a 98.00-98.50 range. He also notes that USD/JPY could creep back to 158, even as US Treasury Secretary Scott Bessent visits Japan and may offer support for Japan's FX intervention efforts [2].
In the Canadian Dollar (CAD) market, Scotiabank strategists Shaun Osborne and Eric Theoret report that the CAD is a mild outperformer against the USD, aided by firmer oil prices. Despite softer Canadian jobs data—marked by a drop in jobs, full-time losses, and a rise in the unemployment rate—wage growth remains strong at 4.8%, well above inflation. This has kept Bank of Canada (BoC) tightening expectations unchanged, with OIS pricing in around 40bps of tightening by year-end. Technically, USD/CAD gains have stalled below resistance at 1.3710/20, with support at 1.3640/45 and 1.3550/75. The short-term trend momentum is now neutral, but daily and weekly indicators remain USD-negative, which could limit further USD gains [3].
Overall, the interplay between rising oil prices, intervention risks, and inflation expectations is creating a complex and volatile environment for major currency pairs. Analysts from all three sources emphasize the importance of upcoming economic data and geopolitical developments in shaping near-term currency movements.
CONCLUSION
Rising oil prices and geopolitical uncertainty are fueling volatility in major currency pairs, with intervention risks capping USD/JPY gains and the US Dollar Index holding firm ahead of key inflation data. The Canadian Dollar remains resilient despite mixed domestic data, supported by strong wage growth and stable tightening expectations. Market participants are closely watching upcoming economic releases and policy signals for further direction.