The core event centers on the confirmation by both the United States and Iran that they will send delegations to Pakistan for the first round of negotiations on a 10-point peace proposal, following recent escalations in the Middle East. The talks are scheduled for Saturday, with the US team led by Vice President JD Vance, as stated by White House press secretary Karoline Leavitt, and the Iranian team confirmed by ambassador Reza Amiri Moghadam via social media [1][2].
Market reactions have been mixed, reflecting ongoing concerns about the sustainability of the ceasefire. The NZD/USD currency pair traded 0.2% higher near 0.5835 during the European session, with the New Zealand Dollar showing particular strength against the Japanese Yen (+0.51%) and the US Dollar (+0.29%) [1]. Meanwhile, the USD/CHF pair consolidated above 0.7900 after rebounding from a low of 0.7870, as investors sought safety in the US Dollar amid risk-off sentiment [2]. The S&P 500 futures were down 0.4% in European trade, and the US Dollar Index (DXY) traded subdued around 99.00 [1].
Tensions remain high after Iran closed the Strait of Hormuz, citing Israeli attacks on Lebanon that allegedly violated the peace proposal, resulting in more than 180 casualties. While Iran accused the US of violating the agreement, Israel and the US maintained that their operations against Hezbollah in Lebanon were not covered by the deal. US President Trump warned of further action if Tehran fails to comply [1][2].
Forward-looking statements from the sources highlight that the peace process remains alive, with both sides moving forward with talks despite the fragile ceasefire. In the US, the Federal Reserve's latest meeting minutes indicated a balanced stance, with rate cuts still possible but some members open to tightening if inflation persists above the 2% target. Key economic data releases, including the US Personal Consumption Expenditures (PCE) Price Index and the Consumer Price Index (CPI), are expected to provide further market direction [2].
CONCLUSION
Both the US and Iran are proceeding with peace talks in Pakistan despite ongoing tensions and a fragile ceasefire. Currency markets have responded with moderate risk aversion, supporting the US Dollar and boosting the New Zealand Dollar against several majors. The outcome of the talks and upcoming US inflation data will be closely watched for further market direction.