Thursday was the day the market effectively decided that the peace process still lacked credibility. Reuters reported that the dollar climbed against major currencies as signs the U.S. and Iran remained far apart on a deal dashed hopes of de-escalation, revived fears of a prolonged energy shock, and boosted safe-haven demand. That made Thursday a cleaner continuation session than Wednesday, because now the macro logic was aligned again: stronger dollar, higher oil, more caution.
Reuters also reported that oil rose more than 5% to around $107.68 as markets grew increasingly anxious about the five-day negotiation deadline and the risk that the Strait of Hormuz would remain effectively closed. At the same time, U.S. jobless claims edged up only slightly, which signaled a still-stable labor market and gave the Fed room to stay steady while monitoring war-related inflation risks. In other words, the U.S. side of the pairings was not deteriorating fast enough to undermine the dollar.
EUR/USD
Technical Analysis
EUR/USD weakened in a much more convincing way than it had on Wednesday. The pair resumed a lower trajectory and traded like a market in which the previous day’s tentative stabilization had been rejected. Technically, that is usually more bearish than uninterrupted selling because it tells you rebound attempts are being actively sold by stronger hands.
Fundamental Analysis
Reuters reported the euro fell 0.3% to $1.1524. That move reflected the same macro imbalance that had defined much of March: Europe remained highly exposed to energy stress, while the U.S. retained haven demand and relative energy resilience. Even though ECB officials were talking about the option of raising rates if inflation surged, the euro still looked weaker in relative terms because the region’s growth and energy vulnerability remained front and center.
GBP/USD
Technical Analysis
GBP/USD weakened again, and Reuters later described sterling as falling for a third day as investors favored safe-haven dollars. The pair’s structure looked more fragile than EUR/USD’s in some respects because sterling had failed to build any meaningful recovery during the midweek lull. Technically, that left it more exposed once the dollar bid returned.
Fundamental Analysis
Reuters reported that sterling fell to around $1.336 and highlighted that oil prices had risen about 45% since the war began in late February, intensifying inflation fears and shifting expectations toward hikes rather than cuts by central banks, including the BoE. Yet that did not help sterling. The reason is critical: the UK’s reliance on imported energy, fragile fiscal position, and weak growth backdrop meant higher rates were not a clean positive for the pound. Instead, they added to the sense that the UK was trapped in an uncomfortable stagflation-like policy mix.
USD/CAD
Technical Analysis
USD/CAD kept grinding higher. Reuters reported the Canadian dollar weakened for a fourth straight day to around 1.3850, touching its weakest intraday level since January 20. Technically, a fourth consecutive decline in the loonie tells you the market is not treating CAD as a normal oil beneficiary. Instead, it is treating it as another currency that cannot escape the gravitational pull of a stronger U.S. dollar regime.
Fundamental Analysis
The key takeaway from CAD on Thursday was that fading optimism for an early end to the war was enough to weigh on risk-sensitive currencies even when commodity prices might otherwise help them. Reuters explicitly framed the loonie’s move that way. This reinforced a lesson from the whole week: when geopolitics dominates, USD/CAD often trades first as a risk and dollar pair, and only second as an oil pair.
Market Outlook
Thursday restored the stronger-dollar regime much more convincingly than Tuesday had. The market still wanted evidence of real diplomatic progress before it would surrender the greenback’s haven premium, and without that evidence, EUR/USD, GBP/USD, and USD/CAD all reverted to more familiar March behavior.
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