MARKET REPORT
Markets Braced for Iran Deadline
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- Dollar weakness on ceasefire hopes provides brief respite for G10 currencies
- Geopolitical uncertainty remains elevated ahead of Trump's Tuesday deadline
Recap
The dollar rallied for four consecutive weeks through Friday as investors sought safe-haven assets amid the Iran conflict. Friday's US jobs report delivered a major surprise, with nonfarm payrolls surging by 178,000 in March, crushing expectations of just 59,000. The unemployment rate unexpectedly fell to 4.3%, prompting markets to erase remaining bets on Fed rate cuts this year. Monday saw the greenback edge lower as ceasefire negotiations gained traction, with risk-sensitive currencies, including the Swedish krona and Australian dollar, leading G10 gains.
Today
Market rates
*Daily move - against G10 rates as of 5pm GMT on 02.04.26
** Indicative rates - interbank rates as of 5pm GMT on 02.4.26
Data points
Click here for a calendar of upcoming economic events Our thoughts
Risk assets are on the backfoot as Trump's Tuesday 8pm ET (01:00 BST Wed) deadline for Iran fast approaches. On Monday evening, Trump reiterated that Iran could face "complete demolition" within four hours if no deal is reached by midnight, with freedom of navigation through the Strait of Hormuz a key condition of any agreement. Adding to unease, the Pentagon abruptly canceled a planned press conference with Secretary of Defence Hegseth and Chairman Gen. Dan Caine, originally scheduled for 13:00 BST.
Friday's blockbuster jobs report has shifted the Fed rate outlook, with markets now pricing out any cuts for 2026, supporting the dollar.
Friday's US CPI takes centre stage – consensus expects a sharp acceleration to 1.0% MoM and 3.4% YoY, likely driven by energy price pressures. Thursday's Core PCE, Jobless Claims, and Q4 GDP will provide further insight into economic resilience. For EUR crosses, watch Wednesday's German Factory Orders and Thursday's Industrial Production. The NZD faces its RBNZ decision with no change expected, and CAD will be sensitive to Friday's employment data.
The combination of robust payrolls, elevated inflation prints, and ongoing geopolitical risk premiums suggests dollar strength may persist.
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