Daily Market Update
April 14, 2026EUR/USD ranged from the mid to high 1.17’s overnight. The GBP/USD pair is seen building on the previous day’s strong move up of around 125-pips and gaining some follow-through traction on Tuesday.
This marks the seventh straight day of a positive move and lifts spot prices to the 1.3535-1.3540 region, or the highest since February 26, during the first half of the European session.
Despite failed US-Iran peace talks over the weekend, investors continue to move towards riskier assets amid hopes that the door for diplomacy remains open and that negotiations would continue.
This, in turn, undermines the safe-haven US Dollar (USD) and acts as a tailwind for the currency pair.
US Vice President JD Vance struck a cautiously optimistic tone on negotiations with Iran and suggested during an interview on Fox News that meaningful progress has been made even as talks have yet to deliver a breakthrough.
Vance further added that the framework for a comprehensive agreement is achievable if Iran is willing to take the next step.
Moreover, Reuters reported that negotiating teams from the US and Iran could return to Islamabad for another round of peace talks this week.
The optimism, along with the uncertainty over future interest rate moves by the US Federal Reserve (Fed), drag the USD to its lowest level since early March and remains supportive of the bid tone surrounding the GBP/USD pair.
Signs of de-escalation of tensions in the Middle East keep Crude Oil prices depressed, easing inflationary fears and reviving bets for a potential interest rate cut by the Fed this year.
Investors, however, remain worried about external energy shocks stemming from the instability in the Strait of Hormuz. In fact, US President Donald Trump said that the US Navy blockade on the strategic waterway has officially started, while Iran responded with threats on all ports in the Persian Gulf and the Gulf of Oman.
This limits the downside for the black liquid, fueling worries about a possible spike in inflation. This, in turn, keeps the USD bulls on the sidelines and backs the case for a further appreciating move for the GBP/USD pair.
The USD/JPY pair loses ground as the safe-haven demand for the US Dollar (USD) faded after reports that the United States (US) and Iran may hold further talks to secure a longer-term ceasefire before the current two-week truce ends.
Moreover, the Greenback also faces challenges as the recent ease in oil prices fades the inflation pressure and hawkish sentiment surrounding the Federal Reserve (Fed) policy outlook.
Fed Governor Stephen Miran said the Iran-related energy shock has not yet affected long-term inflation expectations, adding he expects price pressures to return to the central bank’s target within a year.
US Treasury Secretary Scott Bessent said in a Semafor interview on Tuesday that the US should “wait and see” before cutting interest rates, adding he is confident recent price increases will not become embedded in inflation expectations.
US President Donald Trump said that Iran had made contact and is now looking to resume negotiations. Vice President JD Vance also indicated ongoing diplomatic efforts and a possible path toward US-Iran conflict de-escalation.
Vance stated that recent discussions over the weekend were constructive, providing US officials with deeper insight into Iran’s negotiating stance.
Source FX Street
