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ForexMediumUpdated×6•Originally published 15 April 2026•Updated 17 April 2026•

1 min read

US-Iran Ceasefire Agreement Revives Fed Rate Cut Expectations

Donald Trump, US and Iran maps, oil barrels, pipelines, derricks, and rising charts with fire and arrows.

Key Facts

1Markets are awaiting the second round of US-Iran negotiations scheduled for Thursday in Islamabad.

about 2 months ago

Version History

Version 6about 2 months ago

What changed: Market sentiment transitioned to a consolidation phase with US equity momentum fading ahead of critical weekend negotiations.

Version 5about 2 months ago

What changed: Updated the story to reflect cooling optimism as key issues (nuclear program and Strait of Hormuz) remain unresolved, Pakistan's mediation role, the retreat in EUR/USD, and comments from Japan's Finance Minister.

Version 4about 2 months ago

What changed: The story was updated to reflect the formal ceasefire agreement and its direct impact on Federal Reserve interest rate expectations.

Version 3about 2 months ago

What changed: The US Dollar hit a six-week low as risk appetite improved, boosting the Euro, Sterling, and the Indian Rupee.

Version 2about 2 months ago

What changed: Updated the story to include expectations for a mixed European market open on Wednesday and traders' assessment of the conflict trajectory.

Version 1about 2 months ago

What changed: Updated the report to reflect the stall in the equity rally, the cooling of inflation expectations due to lower oil prices, and the consolidation of the US Dollar as markets move into a wait-and-see mode.

Market behavior has shifted from chasing the risk rally to a cautious 'wait-and-see' stance ahead of critical weekend talks regarding the US-Iran agreement. US equities pushed to fresh highs before momentum faded as investor willingness to extend positions diminished. In the currency markets, the EUR/USD pair retreated from the 1.1800 handle to trade near 1.1775 as the US Dollar steadied. Significant friction points remain unresolved, specifically regarding Iran's nuclear program and the permanent reopening of the Strait of Hormuz. Meanwhile, Japan's Finance Minister Katayama confirmed he is closely monitoring FX movements, citing the impact of oil price volatility on the JPY. As Pakistan mediates to bring Tehran back to the table, the markets remain focused on whether geopolitical stability will clear the path for FED rate cuts.