Forex News

• The announcement of the reopening of the Strait of Hormuz improves sentiment and weakens the Dollar.
• Fed cut expectations returned, with traders pricing in easing back into 2026.
• BoE tightening bets continued to support Sterling’s broader advance.

GBP/USD advances during the North American session on Friday as breaking news revealed Iran’s reopening of the Strait of Hormuz following the agreement of a ceasefire in Lebanon, which pushed the British Pound (GBP) to a daily high near 1.3600. At the time of writing, the pair trades at 1.3567, up 0.36%.

Sterling gains as truce hopes revive BoE-Fed policy divergence

Iranian Foreign Minister Abbas Araghchi announced that the Strait was open for commercial vessels for the remainder of the US-Iran ceasefire. Nevertheless, the passage of military ships or ships from countries hostile to Tehran would not be allowed.

US President Donald Trump said the US military blockade remains in place until there’s a deal between Washington and Tehran, which he said should happen quickly. He added that talks will begin as soon as this weekend and that he will go to Pakistan once the deal is closed.

The financial markets cheered the news, while the Greenback fell to a seven-week low as traders began to price in Federal Reserve (Fed) rate cuts in 2026. Data from LSEG Workspace show that investors are expecting nearly 16 basis points of easing towards the end of the year.

San Francisco Fed Mary Daly said that monetary policy is “slightly restrictive,” above the neutral rate of 3%. She supported one or two cuts in 2026 before the Oil price shock. She could leave rates steady, but if inflation rises, a hike would be needed. A quick end to the conflict can put rate cuts back on the table.

Sterling is extending its gains due to money markets pricing in further tightening by the Bank of England (BoE). Markets expect 24 basis points of tightening by the UK central bank, which, according to its Chief Economist, Huw Pill, inflation is the top priority over other trade-offs.

Aside from this, domestic politics are grabbing the headlines as the Prime Minister Keir Starmer faces pressure to resign after his former ambassador to the US, Peter Mandelson, failed background checks and was tied to Jeffrey Epstein.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3549, holding a constructive bullish tone as spot remains above the cluster of the 50-day, 100-day and 200-day simple moving averages (SMAs) around 1.3530. This tight moving-average floor reinforces the broader uptrend defined by the rising support line from 1.3035, while the FXS Fed Sentiment Index grinding higher suggests underlying demand for the pair remains intact despite recent pullbacks.

On the downside, immediate support is located just below the market at the grouped 50-day, 100-day and 200-day SMAs near 1.3530, with the longer-term rising trend line from 1.3035 offering a deeper structural base if a sharper correction unfolds. On the topside, the primary hurdle is the descending resistance line stemming from 1.3869, and a sustained break above this cap would be needed to open the door to a more extended advance.

(The technical analysis of this story was written with the help of an AI tool.)

• Gold edges higher on Friday, on track for fourth straight weekly gain as US-Iran deal hopes build.
• Softer US Dollar and revived Fed rate-cut expectations help cap downside in XAU/USD.
• Technically, XAU/USD consolidates within tightening Bollinger Bands, signaling a potential breakout ahead.

Gold (XAU/USD) gains traction on Friday as US-Iran deal hopes and the reopening of the Strait of Hormuz push Oil prices lower, easing inflation pressure and reinforcing expectations of Federal Reserve (Fed) interest rate cuts. At the time of writing, XAU/USD is trading around $4,870, up nearly 1.67% on the day, and remains on track for a fourth consecutive weekly gain.

US-Iran deal hopes build

Investor sentiment improved after Iran’s Foreign Minister Abbas Araghchi said on Friday that the Strait of Hormuz is now “completely open” for all commercial vessels for the duration of the ceasefire, in line with the truce in Lebanon.

In reaction, Crude prices retreated sharply with West Texas Intermediate (WTI) sliding to its lowest level since March 11. At the time of writing, WTI is trading around $81.50, down nearly 9% on the day.

US President Donald Trump also signaled progress on diplomatic efforts with Iran. “It’s looking very good that we’re going to make a deal with Iran, and it’s going to be a good deal,” Trump told reporters at the White House on Thursday. He added that the next round of talks could take place over the weekend and indicated he would consider extending the current ceasefire if both sides are close to reaching an agreement.

Despite signs of easing tensions, Gold remains largely range-bound. The prospect of a deal has lifted risk appetite, with gains in global equities limiting flows into the metal. At the same time, a softer US Dollar (USD) is helping contain the downside in XAU/USD.

The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, is trading near 97.73, slipping to more than one-month lows and on track for a third consecutive weekly decline.

Fed interest rate cut bets return as Oil cools

Meanwhile, markets are also reassessing the Federal Reserve (Fed) monetary policy path as Oil prices trim some geopolitical risk premium on hopes that the Iran conflict may be nearing an end.

This has helped ease immediate inflation concerns and revive expectations that the Fed could lower interest rates later this year. Lower interest rates tend to support non-yielding assets such as Gold.

Looking ahead, traders will closely monitor weekend developments around US-Iran talks, particularly any progress toward fully reopening the Strait of Hormuz. Donald Trump said the US naval blockade “will remain in full force and effect” against Iran until a final agreement is fully completed.

Meanwhile, Fars News Agency reported, citing an Iranian official, that if the blockade persists, Tehran could view it as a violation of the ceasefire and may close the Strait of Hormuz again, according to Reuters.

On the data front, the US economic calendar is quiet, with no major releases. Attention will instead turn to speeches from Fed officials, ahead of the blackout period for the upcoming FOMC meeting scheduled for April 28-29.

Technical analysis: XAU/USD consolidates as Bollinger Bands tighten, breakout in focus

In the daily chart, XAU/USD holds well above the 20-day Simple Moving Average (SMA) from the Bollinger Bands at $4,646, keeping the near-term bias constructive. The recent narrowing of the bands indicates reduced volatility and a potential buildup before the next move.

The Relative Strength Index (RSI 14) is hovering near 52, close to the neutral 50 level. This reflects balanced momentum, with neither buyers nor sellers in clear control. The recovery from earlier oversold conditions suggests downside pressure has eased while the Moving Average Convergence Divergence (MACD) stays in positive territory, suggesting that bullish momentum is still present.

On the topside, immediate resistance is located at the Bollinger upper band near $4,931, where fresh supply could reappear if buyers regain traction. On the downside, initial support is reinforced by the Bollinger middle band/20-day SMA at $4,646 ahead of a deeper cushion at the lower band around $4,361, which should limit a more pronounced correction while the broader uptrend remains intact.

(The technical analysis of this story was written with the help of an AI tool.)

• USD/CAD falls to around 1.3670 on Friday despite the drop in Oil prices.
• Oil prices decline after Iran announces the full reopening of the Strait of Hormuz.
• Investors now turn their attention to Canada’s March inflation data due Monday.

USD/CAD declines on Friday, trading around 1.3670 at the time of writing, down 0.26% on the day. The pair remains under pressure as the Canadian Dollar (CAD) strengthens against the US Dollar (USD) despite a sharp drop in Oil prices.

Markets are reacting to geopolitical developments in the Middle East. Iran’s Foreign Minister Abbas Araghchi announced that the Strait of Hormuz is now fully open to commercial shipping during the current ceasefire period. The decision marks a significant de-escalation after several weeks of tensions around one of the world’s most strategic maritime routes.

The reopening of the strait triggered a sharp drop in Oil prices as fears of global supply disruptions faded. West Texas Intermediate (WTI) is trading around $80 per barrel, marking one of its steepest daily declines in recent weeks as Crude export flows through the Gulf are expected to normalize.

In this context, the strength of the Canadian Dollar appears counterintuitive, as the currency is typically highly correlated with energy prices, Canada’s main export. Instead, currency movements seem to reflect broader weakness in the US Dollar.

The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, is trading near multi-week lows around 97.80. The decline in the US Dollar comes as markets reassess the outlook for US monetary policy following the recent easing in energy prices.

According to the CME FedWatch tool, markets are now pricing a 38.2% chance of a 25-basis-point rate cut by the Federal Reserve (Fed) by the end of the year, up from 25.9% the previous day.

In Canada, investor attention is now turning to inflation data. The Consumer Price Index (CPI) for March will be released on Monday and is expected to show a significant acceleration in prices, driven by the energy shock triggered by the war involving Iran.

Bank of Canada (BoC) Governor Tiff Macklem recently warned that the economy could face “higher price levels,” highlighting during a conference at the Montreal Chamber of Commerce the challenge of keeping inflation anchored without triggering a marked economic slowdown.

• AUD/USD hits range high as Hormuz reopening boosts risk sentiment.
• Easing Oil supply fears reduce safe-haven demand for the Greenback.
• Trump signals temporary Iran-related restrictions remain, but overall tone points to de-escalation.

The AUD/USD surged toward the 0.7200 price region on Friday, as improving headlines out of the Middle East weigh on the US Dollar (USD) and support risk-sensitive currencies like the Australian Dollar (AUD).

Market sentiment has shifted following announcements that the Strait of Hormuz is now “fully open and ready for full passage.” This development eases concerns about prolonged supply disruptions in global energy markets.

A subsequent statement by United States (US) President Donald Trump clarified that while the Strait is operational for business, certain naval restrictions specifically related to Iran will remain temporarily in place as negotiations near completion. Overall, the tone indicates de-escalation and positive progress.

This situation has led to a decline in demand for the USD, which had previously been bolstered by heightened geopolitical tensions and concerns over Oil supplies. With energy route stability improving, Oil prices are expected to stabilize or decline, which would lower inflationary risks and alleviate pressure on global central banks.

Short-term technical analysis:

On the four-hour chart, AUD/USD trades at 0.7194. The pair maintains a bullish near-term bias as price holds above both the 20-period Simple Moving Average (SMA) at 0.7159 and the longer-term 100-period SMA at 0.6996, keeping the broader uptrend structure intact. The immediate focus is on how price behaves around the 0.7194 pivot, while the Relative Strength Index (14), hovering just above 70, hints at stretched but still constructive upside momentum rather than an outright reversal signal.

On the topside, initial resistance is defined by the current pivot area at 0.7194, with a subsequent hurdle at 0.7221, where sellers could look to fade further strength. On the downside, first support aligns at 0.7171, ahead of 0.7162 and the nearby 20-period SMA at 0.7159, levels that collectively underpin the short-term bullish structure; a deeper pullback toward the 100-period SMA at 0.6996 would be needed to seriously challenge the prevailing uptrend.

(The technical analysis of this story was written with the help of an AI tool.)

• Silver jumps sharply on Friday, rising more than 5% as the US Dollar weakens.
• The reopening of the Strait of Hormuz pushes Oil prices sharply lower, easing inflation concerns.
• Markets revive expectations of Federal Reserve rate cuts as energy prices cool.

Silver (XAG/USD) surges on Friday, trading around $82.60 at the time of writing, up 5.40% on the day as the US Dollar (USD) weakens and markets reassess the outlook for United States (US) monetary policy.

The rally in the precious metal comes as geopolitical tensions in the Middle East show signs of easing. Iran’s Foreign Minister Abbas Araghchi announced that the Strait of Hormuz has been declared completely open for commercial vessels during the current ceasefire period. The announcement marks a significant de-escalation after weeks of tensions around one of the world’s most strategic shipping routes.

Following the news, Oil prices dropped sharply as supply disruption fears faded. West Texas Intermediate (WTI) fell to around $80 per barrel, marking one of its steepest daily declines in recent weeks. The reopening of the strait is expected to restore more stable flows of Crude shipments through the Gulf, removing part of the geopolitical risk premium embedded in energy prices.

The decline in Oil prices is easing immediate inflation concerns and prompting investors to reassess the trajectory of the US monetary policy. Lower energy prices reduce pressure on consumer prices and increase the likelihood that the Federal Reserve (Fed) could deliver interest rate cuts later this year.

Markets are now pricing 38.2% chance of a 25-basis-point rate cut by year-end, up from 25.9% the previous day, according to the CME Fedwatch tool. Lower interest rates tend to support non-yielding assets such as precious metals, as they reduce the opportunity cost of holding them.

At the same time, the US Dollar remains under pressure. The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, is trading near multi-week lows around 97.80. The softer USD is making Silver more attractive for international investors and reinforcing the metal’s upward momentum.

Despite improving global risk sentiment following the diplomatic developments, the weakening US Dollar and renewed expectations of monetary easing are providing strong support for precious metals. Investors will now closely monitor developments around potential US-Iran negotiations over the weekend, as well as upcoming comments from Fed officials ahead of the blackout period preceding the next Federal Open Market Committee (FOMC) meeting.

Citing an Iranian official, Fars News Agency reported on Friday that if the US naval blockade persists, Tehran will consider it a violation of the ceasefire and close the Strait of Hormuz, per Reuters.

Market reaction

Although the immediate market reaction to this headline was largely muted, the US Dollar (USD) Index recovered slightly from the seven-week low it set near 97.60 earlier in the day. At the time of press, the USD Index was down 0.33% on the day at 97.85.

Nordea’s Henrik Unell maintains a constructive stance on the Swedish Krona, arguing that carry should be secondary to growth prospects and equity flows. After a war-driven spike in EUR/SEK and USD/SEK, improved sentiment, a steady Riksbank, and ongoing rotation from US to Swedish assets by households underpin expectations that SEK fundamentals will recover.

Sentiment, Riksbank stance aid SEK

"So far we haven´t changed the main story or the forecast for the SEK as the war has hopefully plateaued."

"Now that investor sentiment has recovered, we expect that macro fundamentals will do the same."

"The Riksbank will stay on hold for the rest of the year unless geopolitics throws another curveball and the situation escalates."

"The fact that monetary policy and the Riksbank are not acting preemptively or sounding alarm bells because gasoline prices are up should eventually benefit households."

"We believe that the lack of yield support is secondary to growth and equity flow data confirms that households continue to sell US assets and buy Swedish ones."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• EUR/USD edges higher as broad US Dollar weakness keeps the pair on track for a third straight weekly gain.
• De-escalation hopes between the US and Iran weigh on the Greenback as Iran reopens the Strait of Hormuz.
• Oil prices tumble nearly 10%, easing global inflation concerns.

The Euro (EUR) edges higher against the US Dollar (USD) on Friday as the Greenback comes under heavy selling pressure after Iran’s decision to reopen the Strait of Hormuz improved overall market sentiment and raised hopes for a potential US-Iran peace agreement.

At the time of writing, EUR/USD is trading around 1.1814 after hitting an intraday high of 1.1849, remaining on track for a third straight weekly gain.

Iran’s Foreign Minister Abbas Araghchi said on Friday that the Strait of Hormuz has been declared “completely open” for all commercial vessels for the duration of the ceasefire, in line with the truce in Lebanon. However, the reopening appears to be only partial, with commercial vessels allowed to pass through designated routes and subject to approval from the Iranian Revolutionary Guards Navy.

The move signals a notable de-escalation in tensions and could pave the way for further diplomatic progress between the US and Iran. Although uncertainty persists after US President Donald Trump said the naval blockade will remain “in full force and effect” against Iran until a final agreement is fully completed. He also said Iran is working with the United States to remove sea mines, helping restore safe passage.

In reaction, the US Dollar extended its decline, with the US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major peers, trading near 97.74, its lowest level since February 27 and poised for a third consecutive weekly drop.

Crude prices also retreated sharply, with West Texas Intermediate (WTI) falling to its lowest level since March 10. At the time of writing, WTI is trading around $80.00, down nearly 10% on the day.

The pullback in Oil prices is easing immediate inflation risks, reducing pressure on central banks to tighten monetary policy. Markets are now pricing in roughly a 50-50 chance that the Federal Reserve (Fed) will deliver a 25 basis-point rate cut by year-end, while European Central Bank (ECB) tightening bets are being pared back.

Looking ahead, market attention will turn to a possible second round of US-Iran talks scheduled for the weekend. Trump indicated that he would consider extending the current ceasefire if both sides are close to reaching an agreement, adding that “they’ve agreed to almost everything,” including handing over what he described as “nuclear dust,” though this has not been confirmed by Iran.

Investors remain cautiously optimistic that a deal could be reached, raising expectations that the conflict may be nearing an end, although differences over nuclear issues are likely to keep uncertainty elevated and markets sensitive to incoming headlines.

Deutsche Bank’s Robin Winkler argues that German manufacturing faces an ongoing "China shock" as Germany’s trade deficit with China has reached a record size and now exceeds its surplus with the US. He notes that Germany’s relative price competitiveness versus China has recently stopped deteriorating, helped by Euro depreciation and rising Chinese producer prices, suggesting the bilateral trade balance may stabilize in coming months.

China shock pressure may be peaking

"We have long argued that the trade conflict with the US has been a distraction from the more existential threat to German manufacturing: the China shock."

"Indeed, while the trade surplus with the US has recently started to recover from the tariff- induced dip last year, the trade deficit with China has continued to soar. The deficit with China is now larger than ever before, and significantly larger than the surplus with the US."

"The good news is that the driver of the China shock has stalled lately: the decline in Germany's price competitiveness vis-à-vis China appears to be over."

"With this tentative reversal in relative producer prices, it is likely that Germany's trade balance with China will also stabilize in coming months. After all, the China trade shock has primarily been a price shock."

"That said, relative to China, German producer prices are now about 40% higher than a few years ago. German manufacturers thus face a long road toward restoring competitiveness."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)