Investor and forex trader attention is focused on President Donald Trump’s hawkish rhetoric. In a post on Truth Social, he stated that the time given to Iranian authorities to reach a peace agreement is running out — a message that markets interpreted as a signal of a possible resumption of full-scale military operations. However, Trump said today that he is temporarily suspending strikes on Iranian territory following appeals from Gulf states, including Qatar, Saudi Arabia, and the United Arab Emirates. At the same time, he stressed that the active phase of the conflict could resume at any moment if the parties fail to reach a compromise.
The situation in the region remains tense: according to Axios sources, the Republican administration is considering military operations after Tehran’s latest peace proposals — which included demands for compensation for damages and the withdrawal of US bases from the region — were deemed unacceptable. Tomorrow at 20:00 (GMT+2), market participants will focus on the Federal Reserve’s monetary policy meeting minutes, which are expected to shed light on board members’ views on the current economic situation and may contain signals regarding the timing of the next interest rate adjustment. Most analysts currently believe the Fed will maintain its existing monetary policy through year-end and could even return to tightening if inflationary pressure intensifies further.
Eurozone
The euro is weakening against its major peers — the yen, the pound, and the US dollar.
G7 finance ministers meeting in Paris are discussing ways to ease global trade tensions and coordinate supplies of critical raw materials. Most participants, with the exception of the United States, expressed disappointment that Washington and Israel launched strikes on Iranian territory without taking into account the economic consequences and the risk of closure of the Strait of Hormuz — a key maritime route for energy transportation.
They also called on the International Monetary Fund and the World Bank to intensify their work in support of countries most affected by the escalation of the Middle East conflict. The shortage of rare earth metal supplies was another key topic at the summit. G7 members are attempting to coordinate efforts to reduce dependence on China, which dominates supply chains for these materials, critical for the production of electric vehicles, defense systems, electronics, and other goods. German Finance Minister Lars Klingbeil called for exploring joint purchasing mechanisms and expanding rare earth production within the eurozone.
United Kingdom
The pound is strengthening against the euro and the yen, but weakening against the US dollar.
Investors are digesting March labor market data, which came in mixed: the unemployment rate rose from 4.9% to 5.0%, while employment jumped by 148,000 — well above both the 107,000 forecast and the previous reading of 25,000. Average earnings excluding bonuses slowed from 3.6% to 3.4%, while earnings including bonuses increased from 3.9% to 4.1%.
The labor market remains resilient overall, but the negative effects of the ongoing energy crisis are becoming increasingly visible. Analysts note that employers are pushing back against higher taxes, wage indexation, and government reforms aimed at expanding employee rights, all of which have made hiring more expensive. The political situation in the country also remains tense. Keir Starmer stated yesterday that his time as prime minister is not yet over and that he has no intention of stepping down. Meanwhile, his main rival, Manchester Mayor Andy Burnham, ruled out any changes to the fiscal rules set by the current government — a position broadly welcomed by market participants.
Japan
The yen is losing ground against the pound and the US dollar, but strengthening against the euro.
Data released today showed that Japan’s GDP grew by 0.5% quarter-on-quarter in the first quarter, above the 0.4% forecast, and by 2.1% year-on-year, compared with the expected 1.7%. The improvement was driven primarily by resilient domestic consumption and growth in export volumes.
Analysts caution, however, that the latest figures do not yet reflect the negative economic impact of the energy crisis and fear that second-quarter GDP growth could slow sharply or even turn negative. Nevertheless, the current economic stability may push the Bank of Japan toward adjusting borrowing costs as early as its next meeting.
Australia
The Australian dollar is losing ground against its major peers — the euro, the pound, the yen, and the US dollar.
Market participants are reviewing the minutes of the Reserve Bank of Australia’s latest monetary policy meeting. The document shows that board members discussed two scenarios: keeping borrowing costs unchanged or raising them by 25 basis points to 4.35%, which would fully reverse the monetary easing delivered throughout 2025.
Eight of the nine board members found the arguments in favor of tightening more compelling, citing elevated inflation risks as the Middle East conflict continues. They were not confident that a rate of 4.10% was sufficiently restrictive to contain a potential acceleration in inflation.
Oil
Oil prices are attempting to recover lost ground, supported by President Trump’s latest remarks. On the one hand, he announced a temporary suspension of strikes on Iranian territory amid the possibility of reaching a peace agreement with the authorities of the Islamic Republic. On the other hand, he confirmed that a resumption of full-scale military operations remains possible at any moment if the parties fail to reach a consensus.
Analysts warn that a new active phase of the confrontation could cause additional damage to oil production infrastructure across the Gulf states.
At 22:30 (GMT+2), the weekly API crude oil inventory report will be released. Inventories are expected to have declined by 3.4 million barrels, which could act as a catalyst for further upside in oil prices.
