020 7898 0500
President Trump took to his social media platform to scold allies yesterday (Robert Way / Shutterstock)
Donald Trump had a clear message for any allies grumbling about the bottleneck in the Strait of Hormuz. “Go get your you own oil”, the president told allies via his Truth Social platform yesterday, briefly sending the price of Brent crude towards $110 per barrel.
It was a difficult position for him to take given average American petrol prices now top $4 per gallon, the first time that has been the case since 2022. However, financial markets ended what had been a pretty grim March on the front foot after American and Iranian officials last night gave the clearest indication yet they were actively working to end the war.
President Trump predicted the war would end “within two weeks, maybe three”. One interesting caveat to that was how he brushed aside the idea that reopening the Strait of Hormuz was a pre-requisite for ending the war. So while stocks and riskier currencies rallied overnight, the crisis could well have longer to run when it comes to oil and inflation.
Having previously been tightlipped on the issue of diplomacy, Iranian president Masoud Pezeshkian said that his nation would be willing to accept a peace deal, provided it guranteed against “the recurrence of aggression”.
The pound recovered much of Tuesday’s stumble overnight. It strengthened by a cent against the US dollar but only improved marginally against the euro and is still trading close to a one-month low.
Despite the headway between Iran and the United States, the geopolitical picture is highly unstable. Diplomatic tensions between Europe and the United States took a turn for the worse on Tuesday. Italy denied American planes permission to refuel in Sicily, while France blocked flights carrying weapons bound for Israel from its airspace. The second of those decisions drew a furious rebuke from Trump, as well as reportedly anxiety among Nato members.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your account manager on 020 3918 7255 to get started.
GBP: Under pressure
After yesterday’s batch of economic data, sterling came under pressure, ceding morning gains to the US dollar and falling to its weakest level against the euro since the start of March. Showing resilience to the inflationary forces would help, but March’s data won’t arrive for several weeks.
GBP/USD: the past year
EUR: A spring in its step
The eurozone reported a string of cooler than expected inflation releases in March. Headline consumer price inflation came in below expectations in France, Italy and the eurozone as a whole, boosting the euro and reducing the chance of painful interest rate hikes.
GBP/EUR: the past year
USD: Job market cools
Job openings in the US economy fell by almost 400,000 in February and by more than currency markets expected. Hires decreased across all American regions, underscoring the growing economic difficulties at home that jar with President Trump’s aims on the global stage.
EUR/USD: the past year
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business account manager on 020 7898 0500 or your Private Client Account Manager on 020 7898 0541.
