USD

The dollar is trading on the back foot as market sentiment improves following President Trump’s decision to extend the US–Iran ceasefire beyond its original expiry, allowing negotiations to continue. The move has reduced immediate geopolitical tail risks and encouraged a risk‑positive tone across markets, weighing on the greenback after its recent rebound. While the US blockade on Iranian ports remains in place and sporadic incidents continue, the ceasefire extension has eased near‑term escalation fears.

US equity futures are firmer, reinforcing the softer dollar tone, with the Dollar Index slipping back below the 98.50 level after Tuesday’s advance. Attention remains on developments surrounding Federal Reserve leadership following Kevin Warsh’s Senate testimony, though near‑term USD direction is likely to stay closely tied to shifts in risk sentiment driven by Middle East headlines.

EUR

The euro is edging higher alongside the improved global risk backdrop, benefiting primarily from broad dollar softness rather than euro‑specific drivers. EUR/USD remains externally driven, with geopolitics and global sentiment continuing to dictate near‑term price action.

The European calendar brings consumer confidence data for April, while several ECB policymakers, including President Lagarde, are scheduled to speak. However, with markets having largely priced out near‑term policy action and attention focused elsewhere, euro moves are likely to remain subdued unless incoming data or ECB rhetoric materially alter expectations.

GBP

Sterling is trading slightly firmer but with limited conviction following the release of UK inflation data. Headline CPI rose to 3.3% in March, in line with expectations, while core inflation eased marginally, leaving the data with little immediate market impact. As a result, GBP/USD has been largely guided by improved global risk sentiment rather than domestic developments.

With inflation unlikely to significantly shift the Bank of England’s near‑term policy outlook, sterling remains sensitive to broader dollar moves and global risk dynamics. Until clearer domestic signals emerge, GBP gains are likely to remain constrained, with the currency consolidating near recent levels rather than sustaining a directional move.