Global Forex Overview for Apr 06-11, ceasefire cools the USD but does not break its medium-term floor
๐ Forex trading last week was driven mainly by US-Iran developments and the Strait of Hormuz, while economic data stayed in the background. Market mood swung quickly from risk-off to risk-on and then back to caution, creating sharp moves in the USD, oil, and major currency pairs.
๐ข๏ธ Early in the week, Iranโs rejection of a ceasefire pushed oil higher, but the USD did not fully benefit as a safe haven. The DXY slipped toward 99.76-99.79, while US ISM Services signaled stagflation as employment weakened and prices surged, leaving the dollar without a strong macro cushion.
๐ The biggest shift came on Apr 08, when the US and Iran reached a ceasefire agreement. Oil fell more than 17%, the S&P 500 rose 2.44%, the DXY dropped below 99, and risk-sensitive currencies such as EUR, GBP, AUD, and NZD rebounded strongly as safe-haven demand for the dollar faded.
๐ฆ Still, the USD did not lose all support. FOMC Minutes stayed hawkish, with some Fed officials warning that the oil shock could keep inflation elevated, while March US CPI at 3.3% was slightly below the 3.4% forecast but not soft enough to materially change rate expectations. That helped the DXY recover modestly toward 99.1 by weekโs end.
๐ฑ EUR/USD and GBP/USD both rallied after the ceasefire before trimming gains, while AUD/USD and NZD/USD were among the clearest winners from the return of risk appetite. USD/JPY remained near the sensitive 158-160 zone, keeping Japanese intervention risk in focus.
โ ๏ธ Overall, the USD lost part of its safe-haven premium, but Fed hawkishness and still-elevated energy prices kept a floor under the broader trend. Next week, the key issue is whether the ceasefire holds and whether Hormuz flows normalize, because any renewed escalation could quickly reverse recent FX moves.
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