Oil slides, risk bounces as Trump signals war could end soon

Yesterday's currency recap

FX markets remained volatile with intraday swings, but no clear overall direction emerged amid ongoing geopolitical uncertainty. Overnight, spikes in oil prices eased into the European close after G7 ministers signalled readiness to support global energy supply and monitor the situation, while Trump and US Energy Secretary Chris Wright described the recent surge as a temporary “fear premium”, expecting disruptions through the Strait of Hormuz to last only weeks. Early demand for the USD and selling of the EUR also reversed by the European close.

Today's GBP rates

What we think

Markets are slightly risk-on this morning after Donald Trump said the war with Iran could end “very soon”. Oil dropped sharply and Asian equities rebounded, easing safe-haven demand.

In FX, the USD is slightly softer across G10, with AUD, NZD, NOK and GBP outperforming, while JPY lags. Moves remain modest as US 10Y yields hold around 4.1% and uncertainty around the Strait of Hormuz keeps sentiment fragile.

Today the data calendar is relatively light. Markets will instead stay focused on geopolitical headlines and oil price moves, which remain the key drivers for USD direction and broader risk sentiment

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