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08/04/2026 - 07:23 UTCThe USDX plummeted to a one-month low early Wednesday, trading down -0.95% as of 06:35 AM GMT. The Greenback faced intense selling pressure following the breakthrough announcement of a two-week ceasefire between the U.S. and Iran. With President Trump suspending planned infrastructure strikes and Iran reopening the Strait of Hormuz, the sudden shift toward a "risk-on" market environment has stripped the Dollar of its safe-haven appeal.
WTI Oil fell 1.87% on Wednesday morning, following a massive collapse where prices nosedived more than 15% during Tuesday's session. The reopening of the strategic waterway, which handles 20% of global oil supply, has effectively popped the "war premium" that had kept crude elevated. While prices have stabilized slightly above the $90 mark, the market remains focused on the upcoming negotiations in Islamabad on April 10. The sharp drop in energy costs is expected to significantly cool global inflation expectations, drastically altering the landscape for central bank policy.
Gold maintained a slight positive bias, edging up 0.12% by 06:35 AM GMT, following a rise of 3.75% on Tuesday. While the broader "risk-on" sentiment typically weighs on bullion, the precious metal is currently benefiting from the severe weakness in the U.S. Dollar and a decline in Treasury yields. As investors pare back bets on aggressive Fed rate hikes due to easing energy-driven inflation, the lower opportunity cost for holding non-yielding assets has allowed Gold to hold onto its recent gains. However, the lack of aggressive follow-through buying suggests some caution as the market processes the rapid de-escalation in the Middle East.
Equity markets across Asia and global futures staged a massive relief rally on Wednesday following the announcement of a two-week ceasefire between the U.S. and Iran. Sentiment was ignited by President Trump’s decision to postpone planned strikes and Tehran’s commitment to reopen the strategic Strait of Hormuz. This sudden de-escalation triggered a collapse in oil prices and fueled a powerful "risk-on" surge across global markets as investors anticipate formal peace negotiations.
As of 06:40 AM GMT, regional performance was headlined by the Korea 200, which skyrocketed 7.55% as investors rushed back into a market that had been a major laggard throughout March. Elsewhere, the China SSE rose 2.48%, the China SZSE surged 4.59%, and the Hong Kong 50 added 2.94%, while the Japan 225 edged up 0.31%.
The rally was particularly dominant in the technology sector, where South Korean chipmakers led the charge. Samsung Electronics surged 7.58% after forecasting an eightfold increase in first-quarter operating profit, while SK Hynix skyrocketed 13.64%. This optimistic guidance, combined with cooling Middle East tensions, sparked intense bargain hunting across the semiconductor industry and broader Asian markets.
Looking ahead, market participants will pivot from geopolitical headlines to a critical slate of economic data, starting with tonight's FOMC Meeting Minutes at 9:00 PM. Thursday’s focus shifts to the Final GDP and Core PCE Price Index to gauge the resilience of the U.S. economy. The week concludes with a high-stakes Friday, featuring Canadian employment figures and the U.S. CPI report. With the annual inflation rate projected to reach 3.4%, these releases will be instrumental in determining if the recent de-escalation in energy prices is enough to alter the Federal Reserve's "higher-for-longer" interest rate trajectory.
The EUR/USD pair advanced beyond the 1.1650 level, reaching approximately 1.1670 during Wednesday’s early Asian trading hours. The Euro strengthened against the US Dollar following reports that US President Donald Trump has agreed to a two-week ceasefire with Iran.
According to a White House official, the ceasefire agreement was reached on Tuesday, contingent upon Iran reopening the strategically significant Strait of Hormuz. Israel has also reportedly endorsed the ceasefire, according to media sources. The development follows a proposal by Pakistan’s Prime Minister Shehbaz Sharif, aimed at creating space for renewed diplomatic negotiations between Washington and Tehran.
Market participants are expected to closely track further updates on the ceasefire, as any sustained de-escalation in Middle East tensions could support risk-sensitive assets, including the Euro.
Attention now turns to the release of the Federal Open Market Committee (FOMC) Minutes later on Wednesday. Investors will be looking for insights into policymakers’ assessment of the recent energy market disruptions stemming from geopolitical tensions in the region.
Gold prices maintained a positive trajectory on Wednesday, extending gains for a second consecutive session as a combination of geopolitical and macroeconomic factors pressured the US Dollar. The precious metal climbed to a near three-week high during the Asian session before easing slightly, trading close to the $4,800 level while still posting solid daily gains.
The US Dollar came under renewed selling pressure following news of a temporary ceasefire between the United States and Iran. President Donald Trump announced a two-week suspension of planned military action, conditional on Iran ensuring the reopening of the Strait of Hormuz. Iranian officials confirmed their acceptance of the ceasefire, with diplomatic talks expected to commence in Islamabad later this week. The development has boosted market sentiment and reduced demand for the Dollar, indirectly supporting gold prices.
Additional pressure on the Greenback emerged as easing geopolitical tensions triggered a decline in crude oil prices. Iran’s Foreign Minister indicated that safe transit through the Strait of Hormuz would be maintained during the ceasefire period, helping to alleviate supply concerns. Lower energy prices have, in turn, softened inflation expectations, reducing the likelihood of further interest rate hikes by the Federal Reserve.
This shift in rate expectations has weighed on US Treasury yields, providing further support for non-yielding assets such as gold. However, despite the bullish momentum, the absence of strong follow-through buying suggests that traders may remain cautious about positioning for further upside in the near term.
Oil markets experienced a sharp sell-off on Wednesday, with prices plunging nearly 15% after US President Donald Trump announced a two-week ceasefire agreement with Iran, alongside measures aimed at easing congestion in the critical Strait of Hormuz.
The decline followed confirmation from President Trump that Washington would suspend military action against Iran for two weeks, just ahead of a previously set deadline. The move came after the US reportedly achieved key strategic objectives, while Iran put forward a multi-point proposal that could form the foundation for broader negotiations.
Tehran also signaled a conditional willingness to de-escalate, indicating that safe passage through the Strait of Hormuz could resume during the ceasefire period, provided hostilities cease and maritime coordination protocols are observed.
The diplomatic breakthrough was supported by last-minute mediation efforts, with Pakistan playing a notable role in encouraging both sides to step back from further escalation. In the lead-up to the announcement, oil prices had surged to multi-month highs amid concerns that potential US military strikes could significantly disrupt Middle Eastern supply routes.
In a subsequent statement, President Trump said the United States would assist in clearing vessel congestion in the Strait of Hormuz, expressing optimism that the ceasefire would hold. He described the agreement as a “double-sided pause” and characterized the development as a positive step for global stability.
The Strait of Hormuz, a vital chokepoint responsible for roughly one-fifth of global oil shipments, had faced severe disruption during the recent period of heightened tensions, amplifying concerns over supply security and driving earlier price volatility.
US equities closed with modest gains on Tuesday, recovering from earlier losses as diplomatic efforts surrounding the Strait of Hormuz offered a degree of relief to investors. The rebound followed a request by Pakistan for President Donald Trump to extend a key deadline by two weeks and for all parties involved in the conflict to observe a temporary ceasefire.
Market sentiment remained fragile, with investors balancing hopes for de-escalation against persistent geopolitical uncertainty. President Trump reiterated his stance ahead of a previously set deadline, warning that failure to reach an agreement could result in US strikes on Iranian infrastructure, including bridges and power facilities. He emphasized that any ceasefire arrangement must include Iran’s commitment to reopening the Strait of Hormuz, a critical artery for global energy supplies.
Investors are now turning their attention to upcoming inflation data, including the US consumer price index report, which is expected to provide further insight into the extent to which energy price volatility is feeding into broader inflation trends. The Federal Reserve has indicated that any inflationary effects stemming from the recent oil shock are likely to be temporary.
On the corporate front, several stocks posted notable gains. Broadcom shares surged after the company announced a long-term partnership with Google to develop next-generation AI-focused processors and supply critical infrastructure components. In the healthcare sector, managed care companies rallied after regulators approved a stronger-than-expected rate increase for 2027, lifting shares of major insurers including Humana and UnitedHealth.
The materials contained on this document should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. For the full disclaimer click here.
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