Foreign Exchange Market Update

April 13, 2026

U.S. Dollar Plunges as US-Iran Ceasefire Halts Haven Bids

The U.S. dollar plunged against major currencies during the week ended April 10 as a ceasefire between the U.S. and Iran limited haven buying.

As hopes of an end to hostilities lured investors back to risky assets, the U.S. dollar inter alia declined against the euro, the British pound, the Australian dollar, the Japanese yen, the Canadian dollar, the Swedish krona, and the Swiss franc. As a result, the Dollar Index, which measures the Dollar's strength against a basket of 6 currencies, also dropped more than 1.5%.

During the past week, the Dollar Index traded between the weekly high of 100.29 recorded on Monday and the weekly low of 98.53 recorded on Wednesday. With the dramatic de-escalation in the Middle East conflict, the dollar index eventually closed the week's trading at 98.65, implying a decline of 1.57% from the level of 100.22 on April 3.

Currency markets also digested the Fed's outlook on inflation and the labor market contained in the minutes of the Federal Open Markets Committee released on Wednesday. According to the document, several participants felt that measures of near-term inflation expectations had risen in recent weeks, reflecting the substantial rise in oil prices caused by events in the Middle East.

Participants also expected that higher oil prices would increase inflation in the near term and delay the anticipated decline in inflation toward the Committee's 2% objective. The participants also judged recent readings like job openings, layoffs, hiring, and nominal wage growth, which continued to suggest that the labor market was broadly in balance and that the low rate of job growth was roughly in line with slower labor force growth.

Several key economic data updates released during the week also swayed currency market sentiment. Data released on Thursday showed the U.S. economy expanding at an annualized rate of 0.5% in the fourth quarter. The core personal consumption expenditures (PCE) price index, the Federal Reserve's preferred gauge of underlying inflation, rose by 0.4% in February.

Data released by the U.S. Bureau of Labor Statistics on Friday morning showed headline inflation readings. Annual headline inflation increased to 3.3% from 2.4. Headline inflation on a month-on-month basis jumped to 0.9% from 0.3%. Core consumer prices, which exclude food and energy prices, increased by 2.6% on a year-on-year basis. Likewise, on a month-on-month basis, core inflation remained steady at 0.2%.

Amidst the U.S. dollar's plunge attributed to the geopolitical relief, the EUR/USD pair jumped 1.76% during the week ended April 10. From the weekly low of 1.1505 touched on Monday, the pair climbed to a high of 1.1740 on Friday. The pair eventually closed the week at 1.1720, versus 1.1517 a week earlier.

The British pound also surged against the U.S. dollar during the week ended April 10. The GBP/USD pair, which had closed at 1.3194 on April 3, rallied more than 2% during the week ending on April 10 to close trading at 1.3462. The weekly trading range was wider between a low of 1.3177 recorded on Monday and a high of 1.3486 on Wednesday.

The Australian Dollar jumped 2.5% against the U.S. Dollar during the past week. The AUD/USD pair surged from the level of 0.6891 recorded on April 3 to close the week ending on April 10 at 0.7062. During the week, the pair oscillated between a low of 0.6876 recorded on Monday and a high of 0.7096 recorded on Thursday.

The U.S. Dollar declined marginally against the Japanese Yen also during the week ending on April 10. The USD/JPY pair closed the week at 159.30 versus 159.59 a week earlier, registering a decline of 0.18%. The pair oscillated heavily during the week, recording the week's high of 160.04 on Tuesday and the week's low of 157.88 on Wednesday. 04/13/2026 - 10:10:00 (RTTNews)