By Jiaxing Li
HONG KONG, April 2 (Reuters) – Major currencies held steady in thin trading on Thursday, as investors awaited a high-stakes televised address from U.S. President Donald Trump that is expected to shed light on a possible ceasefire in the Gulf war.
In Trump’s national address scheduled for 9 p.m. EDT (0100 GMT), the president is expected to say the U.S. military has accomplished its wartime goals with Iran and reiterate plans to wind down the conflict within two to three weeks – remarks that could set the tone for global markets.
The U.S. dollar has benefited from a safe-haven bid since the conflict began in late February. Expectations that a ceasefire could be near have reversed some of the markets’ most popular trades and put the greenback on a two-day decline.
The euro stood at $1.1592 and the sterling fetched $1.3308, both scarcely changed versus the dollar in early Asian trade while retaining recent gains.
The risk-sensitive Australian dollar and the New Zealand dollar were also steady, trading at $0.69265 and $0.57495, respectively.
The dollar index, which measures the currency against a basket of currencies, was little changed at 99.56 after a 0.3% decline on Wednesday.
“It all hinges now on what U.S. President Donald Trump says in his address to the nation today,” said Kyle Rodda, senior financial market analyst at capital.com.
“But there is a quiet optimism, perhaps if only as market participants look to reshape the narrative to explain the price action – of a de-escalation in the war.”
Carol Kong, a currency strategist at Commonwealth Bank of Australia, cautioned that even a U.S. military pullback would not stop Iran from likely curbing access to the Strait of Hormuz – a chokepoint for roughly 20% of global oil and liquefied natural gas flows.
“Together with damaged energy and transport infrastructure, energy supplies are unlikely to return to pre-war levels quickly,” she said.
The Japanese yen traded at 158.64, away from the psychologically important 160 level seen as the line in the sand for intervention by Japanese authorities.
Beyond Trump’s speech later today, attention will turn to Friday’s non-farm payrolls report. The market is looking for a 60,000 rise in jobs for March, according to the median estimate of economists polled by Reuters.
A sharp deterioration in the labor market could likely revive expectations for rate cuts from the Federal Reserve this year, which have been largely priced out as sharply rising oil prices from the Iran war stoked inflation concerns.
(Reporting by Jiaxing Li in Hong KongEditing by Shri Navaratnam)
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