US President Donald Trump announced an indefinite extension of the ceasefire with Iran, stating that military actions would be paused until Washington receives a unified proposal from Tehran and negotiations make progress [1][3][5][6][7]. Despite the ceasefire extension, the US continues its naval blockade of Iranian ports, aiming to restrict Tehran’s key revenue sources by limiting maritime trade [1][5][6][7]. Iran has warned of strong retaliatory strikes if the blockade persists and has cited the blockade as a reason for not resuming peace talks with the US [1][5][6][7]. According to Tasnim News Agency, Iran had not requested a ceasefire extension, highlighting ongoing friction between the two countries [6].
The geopolitical uncertainty has led to increased market caution. The US Dollar (USD) gained ground against the Euro, with EUR/USD remaining subdued around 1.1740 for a second day [1]. The USD/CAD pair held above 1.3650, as softer oil prices countered USD weakness, while technical indicators suggested only tentative stabilization [2]. The AUD/USD edged higher near 0.7160, supported by expectations of a Reserve Bank of Australia (RBA) rate hike due to oil-driven inflation risks, with markets pricing in a 77% probability of a hike next month [3]. The GBP/JPY cross retained a bullish bias, trading near weekly highs around 215.35-215.40, as traders awaited UK CPI data to reaffirm Bank of England rate hike expectations [4]. The USD/CHF traded flat near 0.7800 as investors awaited Iran’s response to the ceasefire extension [7].
Asian equities were mixed amid the uncertainty. Japan’s Nikkei 225 rose over 0.5% to near 59,650, while China’s SSE Composite gained 0.26% to near 4,100. In contrast, Hong Kong’s Hang Seng Index fell 1.32% to near 26,140, and South Korea’s KOSPI dropped over 0.2% to near 6,370. The Hang Seng’s decline was attributed to investor caution over stalled US-Iran talks and disruptions to key oil routes, which fueled inflation concerns [5].
Gold (XAU/USD) saw modest gains above $4,750 as the USD retreated on the ceasefire extension, but lacked strong bullish conviction due to ongoing geopolitical risks and expectations for a less dovish Federal Reserve [6]. Fed Chair nominee Kevin Warsh emphasized his independence and commitment to a smaller balance sheet, which could imply lower rates and stronger economic conditions, though he made no promises to Trump regarding rate cuts [3][6][7]. Strong US Retail Sales data, with a 1.7% MoM increase in March (vs. 1.4% expected), prompted economists to upgrade growth estimates for Q1, supporting the USD [1][6].
Efforts to reopen the Strait of Hormuz are ongoing, with military planners from over 30 countries meeting in London to finalize plans [1][5]. The European Central Bank (ECB) President Christine Lagarde warned that the Eurozone outlook remains highly uncertain due to the energy supply shock linked to Middle East tensions, though energy prices have not yet reached worst-case levels [1].
According to [6], while the ceasefire extension has provided some relief, persistent geopolitical risks and the ongoing blockade keep markets volatile. Forward-looking statements from central banks and upcoming economic data, such as the Eurozone PMI and UK CPI, are expected to further influence market direction.
CONCLUSION
The indefinite extension of the US-Iran ceasefire has eased immediate military concerns but ongoing blockades and geopolitical tensions continue to drive market caution and volatility. Key asset classes, including major currency pairs, equities, and gold, are reacting to both the ceasefire news and broader economic data. Market participants remain focused on further developments in US-Iran relations and upcoming central bank decisions for future direction.