Forex Today: Investors seek safety as US-Iran negotiations break down

Monday, April 13: Key Market Updates

As the week begins, financial markets adopt a cautious stance following unsuccessful negotiations between Iran and the United States over the weekend. The only notable entry on the US economic calendar today is the March report for Existing Home Sales.

President Donald Trump described the discussions with Iran as "very friendly," claiming Iran agreed to nearly all US demands. However, the talks stalled due to Iran's unwillingness to abandon its nuclear program.

On Sunday, President Trump told reporters that the ceasefire between the US and Iran remains intact despite the lack of progress in talks. Meanwhile, the US military announced plans to impose a blockade on maritime traffic entering and leaving Iranian ports in the Strait of Hormuz starting at 10:00 EST Monday. According to the Wall Street Journal, Trump and his advisors are weighing the possibility of resuming military action alongside the blockade to pressure Iran into accepting US terms for ending the conflict.

Market Movements

• Crude Oil: Oil prices surged at the opening, with West Texas Intermediate (WTI) trading near $96 per barrel, marking a daily increase of about 6%.
• US Stock Futures: Reflecting the risk-off sentiment, US stock index futures dropped between 0.6% and 0.7%.
• US Dollar: The US Dollar Index climbed over 0.3%, reaching close to 99.00.
• Inflation Data: Friday’s US data showed annual inflation, measured by the Consumer Price Index (CPI), rose to 3.3% in March, up from 2.4% in February and matching forecasts. Monthly CPI increased by 0.9%, as expected, following a 0.3% rise the previous month.

Commodity and Currency Highlights

• Gold: After last week’s gains, gold prices dropped sharply at the opening, hitting a six-day low below $4,650. XAU/USD recovered during the European morning, trading above $4,700.
• EUR/USD: The euro started the week with significant losses but found support, edging up toward 1.1700 in early European trading, though still down about 0.3% for the day.
• GBP/USD: After nearly a 2% rise last week, the British pound opened with a bearish gap and was trading just above 1.3400, down 0.35% on the day.
• USD/JPY: The dollar continues its upward momentum against the yen, trading above 159.50 after two days of gains. Bank of Japan Governor Kazuo Ueda commented during the European session that economic recovery remains modest following the Middle East conflict, and reaffirmed that underlying inflation is gradually approaching the central bank’s target.