Weekly Preview: U.S. Retail Sales, U.K. CPI, Tesla Earnings

EUR/USD remained under pressure on Monday, hovering near the 1.1750 level after opening lower. The currency pair continued to struggle as the US Dollar gained support from increased safe-haven demand amid escalating tensions between the United States and Iran. Reports from Iran’s state news agency, IRNA, indicated that Tehran has declined to resume negotiations with US officials, citing what it described as “unrealistic expectations” along with other unresolved concerns.

Iran has maintained restrictions on the Strait of Hormuz following recent US and Israeli strikes on February 28. Although officials briefly suggested the waterway could reopen on Friday, that move was reversed a day later after US President Donald Trump reportedly refused to ease restrictions on Iranian ports.

President Trump also stated on Truth Social that US representatives would travel to Islamabad on Monday for talks related to Iran. At the same time, he criticized Tehran’s renewed closure of the Strait and reiterated warnings of potential strikes on Iranian infrastructure, including power plants and bridges.

The US Dollar also found additional support as investors continued to price in a “higher-for-longer” Federal Reserve policy stance, driven by persistent inflationary pressures and geopolitical uncertainty in the Middle East. Market attention is now shifting to Tuesday’s US Retail Sales report, with economists expecting a 1.3% monthly increase in March following February’s 0.6% rise.

Meanwhile, the Euro received some support as traders raised expectations that the European Central Bank could still deliver interest rate increases later this year. ECB President Christine Lagarde acknowledged last week that elevated energy prices are pushing the Eurozone away from its baseline growth trajectory, though she stopped short of signaling imminent tightening measures.

Gold prices remained under pressure on Monday, with XAU/USD struggling to build on a modest rebound after opening lower and touching a one-week low during the Asian session. Although the US Dollar eased from recent highs, gains in the precious metal were limited as rising US Treasury yields and renewed geopolitical tensions supported demand for the greenback.

A sharp rise in crude oil prices added to inflation concerns, pushing bond yields higher and reducing the appeal of non-yielding assets such as gold.  Market sentiment was further influenced by escalating tensions between the United States and Iran over the Strait of Hormuz.  US President Donald Trump stated that restrictions on Iranian ports would remain in place until a peace agreement is reached, adding another layer of uncertainty to global markets.

The White House also confirmed that Vice President JD Vance would lead a second US delegation for renewed talks aimed at ending the conflict. However, Iranian state media reported that Tehran would not participate in negotiations while the blockade remains active. This has weakened expectations for a diplomatic breakthrough before the current ceasefire expires on April 22.

The renewed uncertainty has prompted a fresh wave of risk aversion in global markets, supporting the US Dollar’s safe-haven status. However, gains in the currency remain limited as traders scale back expectations of further Federal Reserve tightening.

With no major US economic data scheduled for release, gold and the dollar are likely to remain driven by further developments surrounding the US-Iran conflict.

Oil prices climbed sharply on Monday as markets reacted to growing concerns that the fragile ceasefire between the United States and Iran could collapse following the seizure of an Iranian cargo vessel by US forces. Continued disruption to traffic through the Strait of Hormuz also added to supply fears.

The rebound followed steep losses on Friday, when both benchmarks fell around 9% after Iran announced that commercial shipping through the Strait of Hormuz would remain open for the duration of the ceasefire. At the same time, US President Donald Trump said Iran had agreed not to close the key waterway again.

However, optimism quickly faded after reports emerged that several tankers were fired upon within 24 hours of Friday’s announcement, raising fresh concerns among shipping operators about the safety of navigating the route. Analysts said fears over renewed attacks have significantly reduced confidence in the temporary reopening.

Tensions escalated further after Washington confirmed on Sunday that it had seized an Iranian cargo ship accused of attempting to breach the US blockade. Iran responded by threatening retaliation, increasing fears that hostilities could resume. Tehran also stated it would not take part in a second round of negotiations that the United States had hoped to begin before the current two-week ceasefire expires later this week.

Shipping confidence is also expected to remain weak, with vessel owners likely to avoid the region until stronger assurances are given that safe passage can be sustained.

US stock markets closed at fresh record highs on Friday after oil prices plunged following Iran’s announcement that the Strait of Hormuz had reopened to commercial shipping. Investors also welcomed signs of possible diplomatic progress between Washington and Tehran.

Despite the rally, some analysts warned that challenges remain for maritime transport through the Strait of Hormuz, including elevated war-risk insurance premiums, possible mine threats, and uncertainty over enforcement measures.

Elsewhere, Netflix shares fell 9.7% after the company issued weaker-than-expected earnings guidance for the current quarter and announced the departure of co-founder and long-serving chairman Reed Hastings.

Wall Street had just completed one of its strongest weeks in months, with both the US 500 and US Tech 100 reaching fresh record highs.

For the week, the Nasdaq gained approximately 6.09%, the US 500 rose around 4.45%, and the US 30 advanced more than 3%.

Investors are now expected to closely monitor geopolitical developments, which are likely to remain the key driver of near-term market direction. Rising oil prices may also complicate the inflation outlook and could influence expectations for future Federal Reserve policy decisions.