Forex News
BNP Paribas economist Hélène Baudchon compares the current Oil and gas price surge linked to the war in Iran with the 2022 energy shock. She argues that weaker demand and fewer supply constraints should limit inflationary pressure and growth damage versus 2022, while central banks’ faster reaction function and close monitoring of transmission lags will be key to containing second‑round effects.
Comparing current and 2022 energy shocks
"Will the same causes produce the same effects? In other words, will the outbreak of the war in Iran and the resulting surge in oil and gas prices lead to a comparable inflationary shock to the one seen in 2022? Will their negative effects on growth be the same as those for the war in Ukraine and the subsequent energy shock?"
"Today, inflationary pressure should be less strong, as demand is less dynamic and supply is less constrained. Therefore, the conditions are seemingly not met for a significant propagation of the rise in energy prices."
"However, this will need to be closely monitored as transmission lags matter, and the return to normal will take time."
"In addition, central banks have learned from the inflationary shock of 2021–2023. They are ready to react more quickly to counter any spillovers, any second-round effects and any spiral between price increases, inflation expectations and wages."
"We have selected a set of indicators to track the impact of this new energy shock, caused by the war in the Middle East, on activity and prices in the Eurozone, the United States, oil and gas markets and emerging countries, and to see how much the current situation resembles the situation in 2022 at the outbreak of the conflict in Ukraine."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
In a video statement released on Friday, Israeli Prime Minister Benjamin Netanyahu said that they have the opportunity to make a historic deal with Lebanon, per Reuters.
Key takeaways
"I agreed to a temporary ten-day ceasefire with Lebanon."
"Our key demand is that Hezbollah must be dismantled."
"Israel has not agreed to Hezbollah demand to withdraw from southern Lebanon back to intenational border."
"We will remain in Lebanon with an extensive security zone up to the Syrian border."
"President Trump told me he is determined to continue blockade of Hormuz Strait and dismantle Iran's nuclear capabilities."
Market reaction
Markets remain risk-positive in the American session and the US Dollar Index stays in the lower half of its weekly range near 97.80, losing 0.4% on the day.
- WTI US Oil prices tumble sharply after Iran announces that the Strait of Hormuz is fully reopened to commercial shipping during the ceasefire period.
- The move removes immediate fears of a major supply disruption that had previously pushed prices sharply higher.
- WTI falls more than 9% on Friday, retreating from an intraday peak above $90 toward levels near $80.
West Texas Intermediate (WTI) US Oil price collapses on Friday, trading near $81.50 at the time of writing after losing 9.12% during the day. The move marks a sharp acceleration lower after the Crude briefly surged above $90 earlier in the day before sellers took control. WTI even touched an intraday low at $80.30, its weakest level since March 10, bringing the psychological $80 level back into focus for market participants.
The sudden sell-off follows a major geopolitical development in the Middle East. Iran’s Foreign Minister Abbas Araghchi announced that, following the ceasefire in Lebanon, the Strait of Hormuz has been declared completely open to all commercial vessels for the remainder of the truce period. According to Araghchi, maritime traffic through the strategic chokepoint will resume via coordinated routes already established by the Ports and Maritime Organisation of Iran.
United States (US) President Donald Trump responded to this development with a post on Truth Social. "The Strait of Hormuz is completely open and ready for business and full passage, but the naval blockade will remain in full force and effect as it pertains to Iran, only, until such time as our transaction with Iran is 100% complete," Trump said, and added that he expects this process to go very quickly since most of the points are already negotiated.
The announcement dramatically changes the market narrative that had previously fueled the sharp rally in Oil prices. In recent days, traders feared a prolonged closure of the Strait of Hormuz following escalating tensions between the US and Iran. The waterway is one of the world’s most critical energy corridors, handling a significant share of global Oil flows.
Earlier estimates from ING suggested that roughly 13 million barrels per day of Oil supply had been disrupted due to the blockade around the Strait, contributing to extreme volatility in the energy market. The reopening, therefore, signals a potential normalization of supply flows, prompting traders to rapidly unwind risk premiums embedded in prices.
As a result, the easing of geopolitical risk is triggering a swift repositioning in Oil markets. With supply concerns suddenly receding, attention is now turning to the durability of the ceasefire and whether Washington and Tehran can reach a more lasting agreement to keep the Strait of Hormuz open over time.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Deutsche Bank analysts flag a sharp rise in 10‑year gilt yields after a report that former United States (US) ambassador Peter Mandelson failed security vetting, with the decision allegedly overruled. This was seen as problematic for Prime Minister Starmer and raised concerns that a successor might relax fiscal rules and increase borrowing, adding to upward pressure on gilt issuance and yields.
Fiscal concerns and politics weigh on gilts
"Finally in the UK, 10yr gilt yields (+3.4bps) saw a sharp move higher in the afternoon, driven by a Guardian story that former US ambassador Peter Mandelson had failed his security vetting clearance for that appointment, and the decision had been overruled by the Foreign Office."
"So that was seen as a problem for Prime Minister Starmer’s position, as he’d previously told the House of Commons that “full due process was followed”."
"That led to a negative market reaction, because the consensus view is that Starmer’s replacement would face pressure to ease the fiscal rules and borrow more, leading to higher gilt issuance."
"Meanwhile, gilts had been slightly underperforming even before that report, as data showed UK GDP grew by a monthly +0.5% in February (vs. +0.2% expected)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Nordea’s Ole Håkon Eek-Nielsen and Jan von Gerich now expect the ECB to deliver four consecutive 25 bp rate hikes starting in June, despite recent ceasefire news in the Middle East. They stress that core inflation has exceeded target for more than four years, the labour market remains tight and the economy has shown resilience, keeping inflation concerns elevated at the ECB.
June liftoff and four-hike sequence projected
"We updated our ECB forecast just before a ceasefire was announced, now seeing four consecutive 25bp rate hikes, starting in June."
"The ceasefire news put the risks to our ECB forecast to the downside, but we continue to think the forecast remains viable."
"Our ECB forecast does not rely on a further escalation in the Middle East, as signs of broader price pressures appear to have been on the increase already before the war in the Middle East."
"Finally, the comments from many ECB Governing Council members have mainly suggested that while the ECB has some time to assess the situation, talking against a hike as early as the April meeting, a June hike remains likely."
"In the longer end of the curve, our ECB view, a growth forecast showing resilience and continued expectations of higher term premia all support a further rise in longer yields."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Abbas Araghchi, the foreign minister of Iran, announced on Friday that, following the ceasefire in Lebanon, passage of all commercial vessels through the Strait of Hormuz is declared completely open for the remaining period of the ceasefire.
He further explained that the passage of vessels through the strait will be on the coordinated route, as already announced by the Ports and Maritime Organisation of Iran.
United States (US) President Donald Trump responded to this development with a post on Truth Social.
"The Strait of Hormuz is completely open and ready for business and full passage, but the naval blockade will remain in full force and effect as it pertains to Iran, only, until such time as our transaction with Iran is 100% complete," Trump said and added that he expects this process to go very quickly since most of the points are already negotiated.
Market reaction
This headline seems to be helping improve the risk mood. At the time of press, US stock index futures were up between 0.8% and 1.2%, while the US Dollar Index (DXY) was trading at its lowest level since late February, below 97.70, losing more than 0.5% on the day.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.57% | -0.53% | -0.62% | -0.34% | -0.82% | -0.64% | -0.73% | |
| EUR | 0.57% | 0.04% | -0.04% | 0.21% | -0.25% | -0.09% | -0.18% | |
| GBP | 0.53% | -0.04% | -0.11% | 0.17% | -0.29% | -0.12% | -0.21% | |
| JPY | 0.62% | 0.04% | 0.11% | 0.28% | -0.20% | -0.04% | -0.12% | |
| CAD | 0.34% | -0.21% | -0.17% | -0.28% | -0.47% | -0.32% | -0.38% | |
| AUD | 0.82% | 0.25% | 0.29% | 0.20% | 0.47% | 0.16% | 0.08% | |
| NZD | 0.64% | 0.09% | 0.12% | 0.04% | 0.32% | -0.16% | -0.08% | |
| CHF | 0.73% | 0.18% | 0.21% | 0.12% | 0.38% | -0.08% | 0.08% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Christine Lagarde, President of the European Central Bank (ECB), gave a statement at the fifty-third meeting of the International Monetary and Financial Committee (IMF) on Friday. She claimed that the uncertainty surrounding the outlook for the Eurozone inflation has increased significantly following the outbreak of the war in the Middle East.
Key takeaways:
The uncertainty surrounding the outlook for Euro area inflation has increased significantly following the outbreak of the war in the Middle East.
Risks to the outlook are tilted to the upside, especially in the near term.
Inflation could turn out higher than the baseline, in particular if inflation expectations and wage growth were to rise in response more than expected.
We are closely monitoring the situation.”
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
Commerzbank analysts highlight that the International Copper Study Group has already shifted its 2026 view to a deficit and is likely to project further tightening into 2027. With refined copper output in China likely still rising, they nonetheless see scope for the copper price, already recovering from March’s setback, to continue climbing over the medium term.
ICSG deficit view underpins price strength
"The International Copper Study Group had already revised its assessment of the copper market last fall, forecasting a deficit rather than a surplus for this year."
"However, the first outlook for 2027 presented by the ICSG is likely to point to further tightening. The copper price, which has already recovered from the setback in March, could continue to rise in the medium term."
"We see further upside potential for the copper price in the medium term, provided the International Copper Study Group forecasts a persistent shortage for 2027."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- GBP/JPY eases from multi-year highs as falling Oil prices support the Japanese Yen.
- Strait of Hormuz reopening sends WTI sharply lower, easing pressure on Japan’s import costs.
- Technically, GBP/JPY remains constructive above the 20-day SMA, upside capped near 216.40
GBP/JPY trades with a mild downside bias on Friday in relatively calm market conditions, with the Japanese Yen modestly outperforming the British Pound as growing expectations around a potential US–Iran peace agreement weigh on Oil prices. At the time of writing, the cross is trading around 215.05, easing from an intraday high of 215.69.
Earlier this week, GBP/JPY rallied to its highest level since July 2008, reaching 215.91, as a surge in Oil prices weighed on the Japanese Yen, given Japan’s heavy reliance on energy imports. However, with Oil prices now trimming some of the geopolitical risk premium, the Yen is regaining traction. Despite the recent pullback, the cross remains on track for a second consecutive weekly advance.
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.
Technical Analysis:
In the daily chart, GBP/JPY holds a constructive bullish bias, holding well above the 20-day Simple Moving Average (SMA) from the Bollinger Bands at 212.92. The pair is pressing into the upper half of the recent volatility envelope, with the upper Bollinger band at 216.39 acting as the next upside cap. Momentum remains supportive, as the 14-day Relative Strength Index at 63.83 stays in positive territory without yet signaling extreme overbought conditions, while the Moving Average Convergence Divergence (MACD) histogram remains positive around 0.33, hinting that buyers still retain control.
On the topside, immediate resistance is located at the Bollinger upper band near 216.39, and a daily close above this barrier would open the way to further gains in the short term. On the downside, initial support emerges at the 20-day SMA Bollinger midline around 212.92, ahead of a deeper technical floor at the lower band near 209.45, where any pullback would be expected to attract renewed demand while the broader bullish structure remains intact.
(The technical analysis of this story was written with the help of an AI tool.)
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.52% | -0.43% | -0.52% | -0.33% | -0.75% | -0.53% | -0.64% | |
| EUR | 0.52% | 0.09% | -0.04% | 0.17% | -0.23% | -0.01% | -0.14% | |
| GBP | 0.43% | -0.09% | -0.13% | 0.09% | -0.31% | -0.11% | -0.21% | |
| JPY | 0.52% | 0.04% | 0.13% | 0.21% | -0.21% | 0.00% | -0.11% | |
| CAD | 0.33% | -0.17% | -0.09% | -0.21% | -0.41% | -0.20% | -0.30% | |
| AUD | 0.75% | 0.23% | 0.31% | 0.21% | 0.41% | 0.21% | 0.10% | |
| NZD | 0.53% | 0.01% | 0.11% | -0.00% | 0.20% | -0.21% | -0.12% | |
| CHF | 0.64% | 0.14% | 0.21% | 0.11% | 0.30% | -0.10% | 0.12% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
- USD/JPY drops sharply after Iran announces that the Strait of Hormuz is fully open to commercial shipping.
- Improving risk sentiment reduces demand for the US Dollar as a safe-haven asset.
- Diverging monetary policy expectations between the US and Japan continue to shape market dynamics.
USD/JPY falls toward 158.20 at the time of writing, down 0.61% on Friday after hitting a daily high of 159.53 earlier. The pair now faces notable selling pressure as improving geopolitical conditions in the Middle East reduce demand for safe-haven US Dollar (USD).
The downward move accelerated after Iran’s Foreign Minister Abbas Araghchi announced that the passage of all commercial vessels through the Strait of Hormuz is now completely open for the remaining period of the ceasefire. He also explained that vessels will transit the strait via a coordinated route previously announced by the Ports and Maritime Organisation of Iran.
This announcement helps ease concerns about major disruptions to global energy flows, a risk that had previously supported the US Dollar amid heightened risk aversion and worries about Oil supply. The easing of geopolitical tensions is now weighing on the Greenback.
Meanwhile, diplomatic developments between Washington and Tehran remain closely watched by investors. US President Donald Trump recently stated that the United States (US) is close to reaching a deal with Iran, reinforcing hopes for a more durable de-escalation in the region.
On the Japanese side, the Japanese Yen (JPY) continues to be influenced by monetary policy expectations. Bank of Japan (BoJ) Governor Kazuo Ueda recently warned that Japan’s economy could face stagflation risks, with inflation driven by an energy-related supply shock alongside weaker economic growth. This environment could encourage the central bank to maintain a cautious stance regarding further interest rate hikes.
Analysts at Société Générale also note that expectations for monetary tightening in Japan have been scaled back, with the next rate hike now seen around June or July. In this context, JPY dynamics remain closely linked to policy expectations and interest rate differentials with the United States.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.55% | -0.48% | -0.55% | -0.33% | -0.75% | -0.57% | -0.66% | |
| EUR | 0.55% | 0.06% | -0.04% | 0.19% | -0.22% | -0.04% | -0.14% | |
| GBP | 0.48% | -0.06% | -0.09% | 0.13% | -0.28% | -0.10% | -0.19% | |
| JPY | 0.55% | 0.04% | 0.09% | 0.22% | -0.20% | -0.04% | -0.12% | |
| CAD | 0.33% | -0.19% | -0.13% | -0.22% | -0.42% | -0.25% | -0.32% | |
| AUD | 0.75% | 0.22% | 0.28% | 0.20% | 0.42% | 0.17% | 0.08% | |
| NZD | 0.57% | 0.04% | 0.10% | 0.04% | 0.25% | -0.17% | -0.09% | |
| CHF | 0.66% | 0.14% | 0.19% | 0.12% | 0.32% | -0.08% | 0.09% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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