Forex Today: Market sentiment prevails as US and Iran reach a two-week truce
Market Highlights for Wednesday, April 8
On Wednesday morning in Europe, financial markets are driven by risk appetite following a provisional two-week ceasefire agreement between the United States and Iran. Key economic releases on the European agenda include February’s Producer Price Index (PPI) and Retail Sales figures. Later in the day, the Federal Reserve will release the minutes from its March policy meeting.
Late Tuesday, US President Donald Trump revealed that a temporary ceasefire with Iran had been reached, contingent upon Iran keeping the Strait of Hormuz open. Iran’s foreign minister confirmed that their military would oversee vessel passage, while the semi-official Tasnim News Agency noted that Iran and Oman are considering imposing transit fees. Negotiations are expected to begin in Islamabad, Pakistan, on Friday. Meanwhile, the office of Israeli Prime Minister Benjamin Netanyahu clarified that the ceasefire does not extend to Lebanon.
US equity indices surged at the start of Wednesday’s session, posting gains between 2.5% and 3.5%. The US Dollar (USD) remains under significant selling pressure, with the USD Index dropping over 0.5% to below 99.00. In contrast, crude oil prices are sharply lower, as West Texas Intermediate (WTI) falls more than 12% to under $89 per barrel.
Currency and Commodity Movements
- Gold: Gold extends its rally in Europe, climbing above $4,800 and advancing over 2.5% for the day.
- EUR/USD: The euro strengthens midweek, trading close to 1.1700 with a daily gain of nearly 0.8%.
- GBP/USD: The British pound benefits from broad USD weakness, rising over 1% to surpass 1.3430.
- NZD/USD: The Reserve Bank of New Zealand (RBNZ) kept its Official Cash Rate at 2.25% after its April meeting. Governor Anna Breman stated that while a rate hike was discussed, there is no evidence yet of persistent inflation expectations. The New Zealand dollar gains nearly 2% to trade near 0.5850 in Europe.
- USD/JPY: The dollar falls sharply against the yen, trading around 158.00, down 1% on the day.
- AUD/USD: The Australian dollar rises 1.5%, reaching its highest level since March 20 above 0.7070.
- USD/CAD: The US dollar weakens against the Canadian dollar for a third straight day, dropping below 1.3850.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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