Key points:

• EUR/USD climbs to $1.1590, up 0.4%
• Dollar weakens on war-end optimism
• Bitcoin reclaims $69K, gold jumps to $4,700

Euro-dollar was seen climbing above $1.1590 as traders are once again optimistic that the war in Iran is near its end.

💶 Dollar Retreats, Euro Steps Forward

• The EURUSD pair advanced to $1.1590 in early European trading Wednesday, up 0.4% and gaining for a second consecutive session.
• Trump’s two-to-three week withdrawal timeline from Iran weakened the safe haven bid that has kept the dollar elevated throughout the conflict. When war risk recedes, the premium investors pay to hold dollars recedes with it, and that dynamic is playing out cleanly in the euro’s favor right now.
• The dollar’s safe haven premium has been one of the defining FX themes of the past five weeks. A credible ceasefire timeline unwinds that trade mechanically.

🛢️ Oil Drops, But the Quarter Tells the Real Story

• It’s not all rosy, though. Brent rose 71% during the March quarter for its largest quarterly percentage gain since the Gulf War in 1990, a move that has already done significant damage to global inflation forecasts, corporate margins, and consumer purchasing power.
• US gasoline crossing $4 a gallon for the first time since August 2022 illustrates that the energy shock has already reached consumers on both sides of the Atlantic regardless of what happens diplomatically in the next two to three weeks.
• For the euro-dollar specifically, lower oil is unambiguously positive because Europe is a net energy importer. Every dollar decline in crude improves the eurozone’s terms of trade and reduces the import bill that has been suppressing the euro’s current account support.

🟠 Risk Assets Broadly Catching a Bid

• In other markets, Bitcoin BTCUSD reclaimed $69,000 as the risk-on wave swept through crypto markets alongside equities and FX.
• Gold XAU/USD jumped back above $4,700, adding roughly $200 over the past few sessions in a move that looks counterintuitive given the de-escalation narrative but reflects gold’s complex positioning in this specific conflict.
• The simultaneous rally in risk assets and safe havens is a signal worth noting. When both go up together it typically means the market is not fully committed to either the risk-on or risk-off narrative, hedging both possibilities rather than making a clean directional bet.

Source: Tradingview