Oil hits a 14-week high as gold snaps a three-day slide before the ECB

A weaker dollar lifts gold and the yen, while crude's run on the US-Iran tanker war sets the backdrop for the European Central Bank's decision and US inflation data.

Commodities and risks

• West Texas Intermediate settled just above $94.00 on Wednesday, up more than 2% and its best level since 22 May, after the United States and Iran spent the week attacking each other's tankers across the Strait of Hormuz. It eased to around $93.90 in Asian hours on Thursday, the first pause after three straight sessions of gains. TD Securities notes crude continues to grind higher while the conflict with Iran shows no sign of resolution.
• Gold recovered to near $4,400, snapping a three-day losing streak, buoyed by a weaker dollar as traders await US PPI inflation data. That leaves it mid-range, between the $4,282 low and the $4,500 cap that have framed it since last week.

Major currency moves

• The Japanese yen extended its rally ahead of central bank meetings, with a Reuters poll indicating the Bank of Japan could raise rates to 1.25% this month and to 1.75% by the second quarter of 2027, earlier than previously expected. USD/JPY touched 152.88 on Wednesday, a multi-month low for the pair, before the yen came off that top and left it just above the mid-153.00s in Asian hours, still below the 155.00 support that gave way on Monday. GBP/JPY bears are eyeing 207.00 after a third straight daily fall.
• The euro steadied above 1.1600, trading near 1.1635, with buyers seeking a decisive break above the 200-day SMA ahead of the ECB's rate decision.
• The Australian dollar finished flat at 0.7219 as rising US yields and RBA hawks offset each other, after touching a fresh four-month high of 0.7237 earlier in the day; its immediate target is 0.7280. On our intraday strength gauge the AUD still ranks the strongest major and the Swiss franc the weakest — a basket reading, not the pair.

Key events today

• EUR · Main Refinancing Rate and Monetary Policy Statement (High impact, 12:15 UTC): the rate is forecast at 2.65% from 2.40%, with the ECB Press Conference following at 12:45 UTC.
• USD · PPI m/m (High impact): forecast 0.4%, previous 0.0%; Core PPI m/m: forecast 0.3%, previous 0.2% — ahead of Friday's CPI, forecast at 0.4% against 0.1%.

Our metrics

• Our MRS reads 45 only because a scheduled US presidential address fell inside the gauge's event window as this was written, zeroing its news component; with that window past the same inputs give 65, in line with the rest of the week. The CTS is 76, a point above yesterday and unchanged in practice, keeping carry trade conditions favourable, while the FSI reads 64 (Greed), down from 67 yesterday and a second straight session lower. The dollar index still has not reclaimed its 200-day average — Wednesday's close was a third straight day lower, near a three-week low — the tell last Friday's weekly wrap left open.