FX Daily: Searching for the off-ramp in Daily Currencies Ratings 31/03/2026 USD: $100/bl light crude and a steady Fed are helping risk assets Trying to second-guess White House policy remains a hazardous occupation, but this Tuesday morning it seems investors are minded to look out for any signs of de-escalation. Helping those views has been a Wall Street Journal report that President Trump is willing to end the war without reopening the Strait of Hormuz. With US light crude now trading above $100/bl – a sensitive level for the White House, apparently – the market will be on the lookout for any softer US rhetoric today. Of course, the Iranians are operating off a completely different playbook and will do their utmost to maintain maximum economic leverage by keeping energy prices as high as possible – hence the attack on a Kuwaiti supertanker in Dubai today. For what it is worth, traders on Polymarket today price a 60% chance of US boots on the ground by the end of April. This compares to a 74% chance priced late last week. Perhaps also helping risk markets have been some comments from the Fed over the last 24 hours. Fed Chair Jerome Powell yesterday sounded quite relaxed and said that medium-term inflation expectations were well-anchored. Clearly, there was no fuel to the view of early Fed hikes here, and money markets switched back towards pricing a Fed cut by the end of the year. This provided some good support to the bond market. US data should be mixed news for the dollar today. JOLTS job opening data is for February and may be reasonably robust. Consumer confidence data is for March, however, and is expected to head back towards the lows seen last April. The latter data can help to keep the Fed mildly dovish and the White House looking for an off-ramp in the Middle East. The above could mean a slightly softer day for the dollar, where DXY is currently pressing the top of a nine-month trading range at 100.50. We should also look out for month-end fixing flows today. US equities have slightly outperformed overseas equities this month, meaning there could be some dollar selling coming through as the buy-side rebalances its portfolios. The same applies to fixed income, where US bonds have outperformed during the global sell-off this month. Chris Turner EUR: Short-dated rates come lower After a staggering 80bp spike this month, short-dated euro swap rates are now starting to turn a little lower. This is a global phenomenon as traders reassess whether central bankers will push ahead with rate hikes in economies operating with much more spare capacity than in 2022. That said, the retracement in euro swap rates has been pretty modest so far. And in a piece we published late last night, we made the case that the rise in nominal rates this month had barely offset the surge in inflation expectations because of the oil shock. And in fact, the two-year real swap differential has actually moved against EUR/USD. That could be tricky for the ECB if, as we expect, it refrains from a rate hike at the end of April and inflation expectations remain elevated. This could prove to be euro-negative. For today, however, the focus will be on eurozone March inflation – expected at 2.6% year-on-year from 1.9% in February. Inflation across the region has not been quite as high as expected, and we could see the chance of an April ECB rate hike repriced a little lower from 50% currently. EUR/USD has found some support in the 1.1440/70 area and could get a modest