Key Moments
- GBP/USD pares earlier gains and stalls near 1.3240 during the European session as risk sentiment deteriorates.
- Iran rejects a US-backed temporary ceasefire, insisting on a permanent deal tied to reopening the Strait of Hormuz.
- Market participants await both President Trump’s response to Iran ahead of the Tuesday 08:00 PM ET deadline and the upcoming FOMC minutes.
Risk-Off Mood Weighs on Sterling
The Pound Sterling relinquishes its early advance against the US Dollar, leaving GBP/USD hovering around 1.3240 in European trading on Tuesday. The pair loses momentum as appetite for risk assets fades following Iran’s refusal to accept a temporary ceasefire with the United States.
At the time of reporting, S&P 500 futures trade 0.35% lower below 6,600, signaling a cautious, risk-off tone across markets. In parallel, the US Dollar Index (DXY) recovers prior losses and stabilizes near the 100.00 mark, underlining renewed demand for the Greenback.
Iran’s Position and Geopolitical Backdrop
During the European session, a senior Iranian official indicates that Tehran rejects a temporary ceasefire arrangement and instead seeks a permanent agreement. The official links such an outcome to the reopening of the Strait of Hormuz, alongside assurances against repeated aggression and compensation for damages.
Market attention centers on how the United States will respond. Investors are closely watching for US President Donald Trump’s reaction to Iran’s refusal to reopen the Strait of Hormuz ahead of his stated deadline of Tuesday at 08:00 PM ET.
Over the weekend, President Trump warned of destroying Iranian civilian infrastructure if the Strait of Hormuz is not reopened. On Monday, he added that Iran should treat this as the “final deadline” and repeated threats of targeting its power plants and bridges.
Market Indicators Snapshot
| Instrument | Level / Move | Context |
|---|---|---|
| GBP/USD | Around 1.3240 | Sterling gives back early gains in European trade |
| S&P 500 futures | 0.35% lower, below 6,600 | Reflects risk-off market sentiment |
| US Dollar Index (DXY) | Around 100.00 | Recovers losses, moves sideways |
Fed Policy Outlook in Focus
On the monetary policy side, traders are also positioning ahead of the release of the Federal Reserve Open Market Committee (FOMC) minutes from the March meeting, scheduled for Wednesday. At that meeting, the Fed kept the federal funds rate unchanged in a 3.50%-3.75% range and emphasized that its policy stance is not guided by a preset path.
Related Market Coverage
- Iran rejects US temporary ceasefire proposal – Reuters
- US Dollar Index gathers strength above 100.00 on heightened uncertainty in the Middle East
- Trump’s deadline nears, increasing market uncertainty
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