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The Reserve Bank of New Zealand keeps interest rates unchanged, and the United States and Iran reach a two-week ceasefire agreement
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Hello everyone, today XM Forex will bring you "[XM Forex]: The Federal Reserve Bank of New Zealand keeps interest rates unchanged, and the United States and Iran reach a two-week ceasefire agreement." Hope this helps you! The original content is as follows:
On April 8, in early trading in Asia on Wednesday, global financial markets fluctuated violently due to the significant easing of the geopolitical situation. Spot gold prices rose strongly by more than 2.5%, trading around US$4,823 per ounce; while U.S. WTI crude oil prices fell more than 19%, trading around US$91.27 per barrel, and may test the key psychological mark of US$90 during the day.
The extreme trends in gold prices and oil prices are directly caused by US President Trump’s announcement of a two-week ceasefire agreement with Iran, which Iran has expressed acceptance. Negotiations between the two sides are scheduled to start on April 10 in Islamabad, Pakistan. Market attention then turned to the upcoming minutes of the Federal Reserve's March policy meeting and other key economic data.
In the foreign exchange market, the U.S. dollar index performed strongly on Tuesday, hovering near an 11-month high. Investors are staying on the sidelines ahead of Trump's deadline for Iran to reopen the Strait of Hormuz. With Iran showing no signs of consent, ongoing Middle East conflicts and the risk of waterway blockades have pushed up energy prices, underpinning the U.S. dollar as the primary safe-haven asset. ING analysis pointed out that unless a reliable ceasefire is achieved or the deadline is significantly delayed, the dollar may continue to attract buying. The U.S. dollar index is currently at 99.852, having hit 100.64 last week, the highest level since May 2025.
In terms of major currency pairs, the yen fell to 159.835 against the US dollar, once touching the 160.00 mark during the session. This level is not far from multi-decade lows and the area that will trigger direct foreign exchange intervention by the Japanese authorities in 2024. The market also digested the data that the US core capital goods orders increased more than expected in February, and awaited the release of PCE inflation data on Thursday.and Wednesday night’s Federal Reserve meeting minutes. The euro was last trading at 1.1575 against the dollar, with traders now pricing in three interest rate cuts from the European Central Bank this year. Among xmmarkets.cnmodity currencies, the Australian dollar was at 0.6950 against the US dollar and the New Zealand dollar was at 0.5700 against the US dollar.
Asian Markets
The Reserve Bank of New Zealand decided to keep the official cash rate (OCR) unchanged at 2.25% for the second consecutive meeting against the backdrop of uncertainty about the economic and inflation prospects caused by the Iran war. However, the statement had limited impact on the NZD or NZD/USD currency pair, with traders now turning to xmmarkets.cnments from RBNZ Governor Dr Anna Breiman at her post-meeting press conference for meaningful impetus.
European Markets
European investor sentiment deteriorated sharply in April, with data showing that the risk of a new recession returned to focus, just as inflation concerns caused by high oil prices intensified again. The Sentix investor confidence index fell to -19.2 from -3.1, well below expectations of -7.5 and marking the weakest reading since April 2025.
The emotional breakdown was widespread. The current situation index plummeted from -9.5 to -22.8, and the expectations index fell from 3.5 to -15.5, showing a rapid change in the outlook. According to Sentix, the recession has accelerated in just four weeks as the effects of the Iran war work their way through financial markets and economic expectations.
At the heart of the recession is the continued surge in energy prices. Crude oil prices above $110, coupled with supply bottlenecks in the Strait of Hormuz, have severely affected market sentiment. Shipping disruptions and attacks on energy infrastructure have heightened uncertainty and heightened concerns that growth will be further constrained.
Inflation risks are also accelerating. Sentix's Inflation Barometer showed price concerns rising sharply again amid energy market disruptions and higher oil prices. The xmmarkets.cnbination of weak growth and rising inflation has added to concerns about stagflation, with investors increasingly worried that the euro zone may face both downward and sustained price pressures in the xmmarkets.cning months.
European zone growth is rapidly losing momentum, and March PMI data shows that with the impact of the war in the Middle East on the economy, the risk of GDP contraction in the second quarter has increased. The PMI services index ended at 50.2 in March, down from 51.9 in February and a 10-month low. The PMI xmmarkets.cnposite index fell to 50.7 from 51.9, hitting a nine-month low.
The data suggests that the modest recovery earlier this year has been effectively erased. According to Chris Williamson, the economy has been "hard hit" by soaring energy prices, supply chain disruptions and financial market volatility, which are now weighing on economic activity and demand.
A key warning sign is the deterioration of forward-looking indicators. New orders fell in March for the first time since July last year. At the same time, conflict-related supply bottlenecks have limited output while pushing up prices. This xmmarkets.cnbination heightens the risk of stagflation. The prospect of a more hawkish response from the European Central Bank to prevent inflation deepensSolid foundation.
The outlook is deteriorating rapidly. PMI data currently show first-quarter GDP growth of only about 0.2%, a clear signal that the economy may contract in the second quarter if the conflict is not resolved quickly.
British economic activity slowed significantly in March, while inflationary pressure accelerated sharply, further exacerbating the risk of stagflation. PMI services fell to 50.5 from 53.9, the lowest since April 2025. The PMI xmmarkets.cnposite index fell to 50.3 from 53.7, showing the slowest overall pace of expansion in six months.
The sharp loss of momentum reflects deteriorating demand conditions. According to Tim Moore, rising geopolitical tensions are "promoting risk aversion", with businesses and consumers alike cutting back on spending and postponing investment decisions. As a result, services output growth weakened significantly.
At the same time, cost pressures are intensifying. Input cost inflation accelerated sharply in March, reaching its highest level in 11 months, driven mainly by rising costs in fuel, transport and wider supply chains. Corporate reporting vendors generally pass.
The xmmarkets.cnbination of slowing growth and rising prices weighed heavily on sentiment. Business optimism has fallen sharply from a 15-month high in January, with xmmarkets.cnpanies citing fragile domestic conditions and concerns about rising borrowing costs.
US Market
US President Trump: I agree to suspend bombings and attacks on Iran within two weeks. This will be a two-way ceasefire. We have received a 10-point plan proposed by Iran and believe it is a feasible plan that can be used for negotiation. We have made great progress on finalizing a long-term peace agreement with Iran.
Federal Reserve-Williams warned that the Iran war will push up overall U.S. inflation; Jefferson: interest rates are roughly in a neutral range. There are downside risks to employment and upside risks to inflation.
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