CACIB FX Daily - FJElite

The initial optimism over the US-lran ceasefire has started to fade as concerns about the stability of the pact emerge. Iran claims that three clauses in the ten- point ceasefire proposal have already been violated. Israel continues strikes against Hezbollah in Lebanon and Iran claims the cessation of hostilities on all fronts, including Lebanon, was part of the ceasefire deal. Iran also claims that it has shot down a foreign drone in its territory. And the US has said there would be no allowing Iran the enrichment of uranium under any final deal, but Iran claims its right to enrich uranium was also part of the ceasefire deal.

There is also yet to be a full re-opening of the Strait of Hormuz. Shipping companies are confused if they are permitted to transit through the passage without Iran’s permission. Iran says its armed forces will control traffic designating safe routes for vessels. Shipowners and insurer groups have warned that more details are needed to determine if safe transit is possible.

Peace talks in Pakistan between the US and Iran have been agreed to take place on 10-11 April. Vice President JD Vance will lead the US delegation, which will also include special envoys Steve Witkoff and Jared Kushner.

At the time of writing, most Asian bourses and S&P500 futures were trading in the red as oil prices moved higher. Most of G10 FX traded in tight ranges during the Asian session with only the NZD showing some volatility and outperforming on further hawkish rhetoric from RBNZ Governor Anna Breman who said the central bank would respond decisively with rate hikes if core inflation accelerated.