The ongoing uncertainty surrounding the US-Iran ceasefire has triggered significant market movements across currencies and commodities, as reported in multiple sources. Israeli air strikes in Lebanon and Iran's subsequent shutdown of shipping traffic through the Strait of Hormuz have heightened geopolitical tensions, with Iranian officials accusing both Israel and the US of breaching ceasefire terms and deeming further peace talks 'unreasonable' [1][2][3]. The White House confirmed Lebanon is not part of the two-week ceasefire between Iran and the US, further fueling skepticism about the truce's durability [3].
In currency markets, the Japanese Yen weakened against the Euro, with the EUR/JPY cross advancing to near 185.20 during the early European session on Thursday. This movement is attributed to concerns over fiscal expansion in Japan and the prolonged Middle East situation, which may prompt more expansionary fiscal policy and contribute to Yen weakness, according to Sho Suzuki of Matsui Securities [1]. However, anticipation of a potential Bank of Japan rate hike at the April policy meeting, with up to a 70% probability as per Tomohisa Fujiki of Citi Research, could support the Yen and create headwinds for EUR/JPY [1]. Meanwhile, the European Central Bank has adopted a hawkish tone, with officials signaling a possible interest rate hike at the April meeting, though many view a June move as more likely [1].
The Swiss Franc strengthened against the US Dollar, with USD/CHF trading around 0.7910, marking its fourth consecutive day in negative territory. This was driven by renewed safe-haven demand amid ceasefire uncertainty and halted tanker traffic through the Strait of Hormuz [2]. The Swiss National Bank kept its key rate unchanged at 0% for the third consecutive March meeting and reiterated its readiness to curb Franc appreciation [2]. Swiss inflation surged to its fastest annual pace of 0.3% in March, offsetting CHF strength and easing pressure on the SNB to adjust policy [2]. The Federal Reserve's March Meeting Minutes indicated a wait-and-see stance, with nearly all participants supporting no change in rates and viewing policy as near neutral [2]. Traders are awaiting the US CPI report for March, expected to show headline inflation rising to 3.3% YoY, up from 2.4%, driven by higher oil prices amid the Middle East conflict [2].
Gold (XAU/USD) remained depressed below the $4,700 mark during the Asian session, stalling its retracement from a three-week high. Skepticism over the US-Iran ceasefire supported the USD's reserve currency status and acted as a headwind for gold, though the Fed's dovish outlook limited aggressive USD bets and helped cap gold's downside [3]. Minutes from the March FOMC meeting revealed a higher-for-longer stance, with officials in no rush to cut rates amid inflation risks from Middle East energy price shocks. Policymakers signaled one rate reduction by year-end and another in 2027, but the timing remains unclear [3]. Traders are cautious ahead of the US PCE Price Index release and the CPI report, which are expected to provide further cues for Fed policy and gold price direction [3].
Technical analysis for gold shows a bearish bias, with the XAU/USD pair holding beneath the 200-period SMA and MACD slipping into negative territory. Initial support is seen at $4,604, with further cushions at $4,412 and $4,102 [3].
CONCLUSION
Heightened geopolitical tensions and uncertainty over the US-Iran ceasefire have driven safe-haven flows, weakening the Japanese Yen and US Dollar while strengthening the Swiss Franc. Gold remains under pressure, with market participants awaiting key US inflation data for further direction. The mixed fundamental backdrop and central bank policy stances suggest continued volatility across affected asset classes.