Oil prices this morning have dropped almost 15% after Donald Trump agreed a two-week ceasefire with Iran. Crucially Iran has also shown a willingness to bring de-escalation to the current conflict in The Middle East, going further to state that safe passage through the Strait of Hormuz can resume as long as hostilities were brought to an end.
The U.S have also received a 10-point plan from Iran, which Trump described as providing a workable basis for negotiations to take place. As part of the 10-point plan, all subjects of concern over the past 6 weeks have been agreed to between The U.S & Iran – with some agreements including;
- A complete halt to all US attacks on Iran
- A permanent ending to the war
- Iran keeping control of the Strait of Hormuz
- Compensation to Iran for the damage of the war
- Full withdrawal of all U.S military from the region.
As a result of these latest developments, the US Dollar has retraced by over 1% against both GBP & EUR as markets now consider the real possibility of an ending to this conflict coming within the next few weeks. The Strait of Hormuz re-opening has also brought relief to markets after the initial concerns around Oil prices and general inflation as this conflict deepened.
Switching our attention to economic data, it’s a fairly quiet day with the only release of importance coming in the form of Euro-Zone Retail Sales for February. Expectations suggest sales would have fallen by 0.1% against January’s release. This could be mainly contributed to continued elevated interest rates causing further spending pressure on households in general and therefore supporting the notion of a lack of consumer demand.
GBP/EUR 1.1474 GBP/USD 1.3410 GBP/AED 4.9274
GBP/AUD 1.9021 GBP/CHF 1.0566 GBP/CAD 1.8582
GBP/NZD 2.3035 EUR/USD 1.1673 GBP/ZAR 22.0479