The dollar sank to its lowest level in a month while the pound shot up on Wednesday after Trump said he agreed to suspend planned attacks on Iranian infrastructure for two weeks.
Iran's 10-point proposal includes withdrawing US combat forces from all regional bases, lifting all sanctions, releasing Iranian assets frozen abroad and full payment of Iran's war-related damages.
The UK inflation rate stood at 3% in February. Before the war, economists expected it to fall in April due to a drop in household energy bills linked to government cuts to "green levies."
British business confidence has fallen amid worries among employers about costs. Firms are set to raise prices more quickly in the coming 12 months as they respond to a surge in energy prices.
JP now expects only one BOE interest rate hike this year after Governor Andrew Bailey said that financial markets had been too aggressive in pricing in higher borrowing costs.
Higher inflation and weaker growth ahead are inevitable for the global economy in the aftermath of the Iran war, the IMF warned. It estimated that global oil supply has reduced by 13%.
Sterling moved closer to 200 SMA above $1.34, a break above which would pave the way for another leg higher. The next major hurdle is seen to lie around $1.3480.
Asset recap
As of market close on 7 April, among EBC major products, UnitedHealth Group shares led gains. Health insurer stocks surged after the US government said it would boost payments for Medicare Advantage plans next year.
Seaport Global just slashed its rating on PulteGroup to Sell with a $100 target, citing weak job growth and slowing housing demand. This move highlights key risks for investors eyeing homebuilders.
The Australian dollar has proved it resilience during the month-long conflict in the Middle East, defying expectations of a collapse as strategists tip the currency to finish the year well north of $0.7.
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