Daily Market Update
April 02, 2026EUR/USD ranged from the low to high 1.15’s overnight. The US Dollar (USD) is under selling pressure on Wednesday, weighed by a better market mood.
Optimism revolves around the Iran war, as United States (US) President Donald Trump said the US will be leaving Iran within two or three weeks, while speaking at the White House on Tuesday.
President Trump will address the nation on Thursday to provide an update on the war. The headline was enough to pull EUR/USD higher.
Early on Wednesday, however, President Trump said he is considering pulling the country out of NATO, given allies’ reluctance to help reopen the Strait of Hormuz.
He also shared a post in Truth Social, claiming Iran’s President asked for a ceasefire, something he would consider when the Strait of Hormuz is reopened.
The EUR/USD pair retreated from an intraday peak of 1.1623 following the release of encouraging US data.
The country published the ADP Employment Change report, which showed the private sector added 62K new jobs in March, beating the 40K expected, while slightly below the previous 66K.
Additionally, Retail Sales rose by 0.6% MoM in February, better than the 0.5% anticipated and the previous -0.1%.
Trump said during a primetime televised speech from the White House on Thursday that Iran had been decimated and that the hard part of the war was done.
However, he added that the US would hit Iran “extremely hard” for the next two to three weeks.
The US President also called for countries that receive oil through the Strait of Hormuz to show “courage” and seize the key waterway, while saying Washington will not allow its Middle East allies to be harmed.
Persistent tensions in the Middle East continue to support a safe-haven currency such as the Greenback and act as a headwind for the major pair.
The Bank of England (BoE) Governor Andrew Bailey cautioned that financial markets are “getting ahead of themselves” by pricing in multiple interest rate hikes for later this year. Traders are fully pricing a full percentage point of BoE monetary tightening in 2026 for the first time, as the Iran conflict continues to fuel inflationary pressures, according to Bloomberg.
The USD/JPY pair changed course on Wednesday after US President Donald Trump rattled markets, reiterating its aggressive rhetoric against Iran in a televised message that was widely expected to deliver a plan to end the hostilities.
Trump, instead, repeated its threats to take Iran back to the Stone Age and called allies to build up the courage to reopen the Strait of Hormuz.
Tehran responded with threats of “devastating attacks” on the US and Israel and deemed US proposals to end the war as “maximalist and irrational”.
Meanwhile, the war enters its 34th day, with Iran and Israel exchanging missile and drone attacks.
In this context, the USD/JPY has found a door open to regain all the ground lost over the previous two days, and draws closer to the 160.00 level, which might trigger a fresh intervention warning by Japanese authorities.
Source FX Street
