The euro rose in European trading on Wednesday against a basket of global currencies, extending its gains for the second consecutive day against the US dollar and hitting its highest level in a week, benefiting from the continued decline in the US currency amid growing optimism over an end to the Iran war, especially following recent statements by Donald Trump.

With eurozone inflation exceeding the European Central Bank’s medium-term target due to rising energy prices, expectations for at least one interest rate hike this year have increased, as markets await further key economic data from Europe.

Price Overview

Euro exchange rate today: the euro rose about 0.25% against the dollar to $1.1579, the highest level in a week, up from the session opening level of $1.1553, after hitting a low of $1.1550.

The euro ended Tuesday’s session up 0.8% against the dollar, marking its first gain in the past six days, as part of a recovery from a two-week low of $1.1443.

Aside from buying from lower levels, the euro gained after less aggressive remarks from the US administration regarding the course of the Iran war.

Over the course of March trading, the euro declined 1.75% against the US dollar, marking its second consecutive monthly loss, due to investors focusing on buying the US currency as a preferred safe-haven asset.

US dollar

The dollar index fell 0.2% on Wednesday, extending its losses for the second consecutive session and moving away from a ten-month high, reflecting the continued decline in the US currency against a basket of global currencies.

Aside from profit-taking activity, the US dollar weakened amid growing optimism over a potential end to the Iran war, particularly following recent remarks by US President Donald Trump.

Trump said on Tuesday that the United States could end its military campaign against Iran within two to three weeks. He added that Tehran is not required to reach an agreement as a precondition for ending the conflict.

US Secretary of State Marco Rubio told Fox News that the United States sees the “finish line” of the war with Iran.

The White House announced that US President Donald Trump will deliver an address to the nation “to provide important updates on Iran” at 09:00 PM Eastern Time on Wednesday (01:00 GMT Thursday).

Sho Suzuki, a market analyst at Matsui Securities, said that looking at the broader market, expectations for a ceasefire are increasing, so the reversal of the long-standing “buy the dollar and sell other currencies” strategy is likely to continue.

European interest rates

ECB President Christine Lagarde said last week that the bank is ready to raise interest rates even if the expected rise in inflation is temporary.

Data released on Tuesday showed that eurozone inflation exceeded the European Central Bank’s target, reaching 2.5% in March as energy prices rose.

Following the data, money markets increased pricing for a 25-basis-point rate hike by the European Central Bank at the April meeting from 30% to 35%.

Sources told Reuters that the European Central Bank is likely to begin discussing interest rate hikes at this month’s meeting.

To reassess these expectations, investors are awaiting further economic data from the eurozone on inflation, unemployment, and wages.

The Japanese yen rose in Asian trading on Wednesday against a basket of major and minor currencies, extending its gains for the third consecutive day against the US dollar and hitting its highest level in a week, benefiting from the continued decline in the US currency amid growing optimism over an end to the Iran war, especially following recent statements by Donald Trump.

As signs of easing inflationary pressures on policymakers at the Bank of Japan increase, expectations for a Japanese interest rate hike in April have declined, with investors awaiting further economic data from Japan.

Price Overview

Japanese yen exchange rate today: the US dollar rose about 0.2% against the yen to ¥158.45, up from the session opening level of ¥158.72, after reaching a high of ¥158.84.

The yen ended Tuesday’s session up 0.6% against the dollar, marking its second consecutive daily gain, as recovery continues from a 20-month low of ¥160.46.

Aside from buying from lower levels, the yen gained after less aggressive remarks from the US administration regarding the course of the Iran war.

Over the course of March trading, the yen declined 1.75% against the US dollar, marking its second consecutive monthly loss, due to investors focusing on buying the US currency as a preferred safe-haven asset.

US dollar

The dollar index fell 0.2% on Wednesday, extending its losses for the second consecutive session and moving away from a ten-month high, reflecting the continued decline in the US currency against a basket of global currencies.

Aside from profit-taking activity, the US dollar weakened amid growing optimism over a potential end to the Iran war, particularly following recent remarks by US President Donald Trump.

Trump said on Tuesday that the United States could end its military campaign against Iran within two to three weeks. He added that Tehran is not required to reach an agreement as a precondition for ending the conflict.

US Secretary of State Marco Rubio told Fox News that the United States sees the “finish line” of the war with Iran.

The White House announced that US President Donald Trump will deliver an address to the nation “to provide important updates on Iran” at 09:00 PM Eastern Time on Wednesday (01:00 GMT Thursday).

Japanese interest rates

Data released this week in Japan showed a slowdown in core inflation in Tokyo during March, in the latest sign of easing inflationary pressures on policymakers at the Bank of Japan.

Following the data, markets reduced pricing for the probability of a quarter-point rate hike by the Bank of Japan at the April meeting from 25% to 15%.

To reassess these expectations, investors are awaiting further data on inflation, unemployment, and wages in Japan.

Gold prices rose on Tuesday amid hopes of easing tensions in the Middle East, but the metal remains on track for its worst monthly performance in more than 17 years, as elevated energy prices have weakened expectations for U.S. rate cuts this year.

Spot gold climbed 1.5% to $4,578.89 per ounce, while U.S. gold futures for April delivery rose 1.2% to $4,611.30 per ounce. The U.S. dollar declined, making dollar-denominated commodities more attractive for holders of other currencies.

Ilya Spivak, Head of Global Macro at Tastylive, said: “Gold prices are rebounding in early Asia-Pacific trading after U.S. President Donald Trump told aides he is prepared to end the U.S. military campaign against Iran… this has triggered a risk-sensitive response across financial markets.”

Spivak added that gold “has been largely stable over the past week, with a notable rise last Friday alongside a drop in Treasury yields, suggesting markets are beginning to view the Iran conflict as a potential economic risk.”

Gold has fallen more than 13% so far this month, putting it on track for its largest monthly decline since October 2008, pressured by a stronger U.S. dollar and fading expectations for Federal Reserve rate cuts this year. However, it remains up حوالي 5% for the current quarter.

Traders now see the likelihood of any Fed rate cuts this year as minimal, as persistently high energy prices could fuel inflation. Gold typically benefits in a low-interest-rate environment, as it is a non-yielding asset.

Before the outbreak of conflict in the Middle East, expectations pointed to two potential rate cuts by the Federal Reserve this year, according to CME Group’s FedWatch tool. Federal Reserve Chair Jerome Powell said on Monday that the central bank can afford to wait and assess the impact of the conflict on the economy and inflation, noting that oil price shocks are typically viewed as temporary.

Meanwhile, spot silver rose 3.3% to $72.27 per ounce, platinum gained 1% to $1,916.77, and palladium climbed 2.3% to $1,437.76.

In summary, gold is receiving short-term support from easing geopolitical tensions, but remains under structural pressure from a strong dollar and U.S. monetary policy expectations.

Global fertilizer and ammonia trade is facing significant pressure due to the effective closure of the Strait of Hormuz, amid ongoing uncertainty surrounding diplomatic negotiations between the United States and Iran.

According to Rystad Energy’s 2025 global trade map, around 15% of global ammonia trade and 21% of urea trade—a nitrogen-rich fertilizer—are tied to exporters that could be affected by the strait’s closure. These include major Middle Eastern producers such as Saudi Arabia and Qatar, in addition to Kuwait, Bahrain, the United Arab Emirates, Iran, and Iraq.

The firm’s analysis indicates that continued logistical disruption could threaten the already strained ammonia and urea markets, with potential spillovers into food and agricultural supply chains, particularly in countries most dependent on these trade flows.

Risks to Food Security

Minh Khoi Le, Senior Vice President and Head of Global Hydrogen at Rystad Energy, said the message to policymakers and buyers is clear: energy security is directly linked to food security.

More than one-fifth of urea exports from Middle Eastern producers directly impact agricultural output. India is among the most exposed, importing between 6% and 8% of its fertilizers from Gulf countries.

A prolonged closure of the strait could quickly translate into tangible economic risks, including potential food shortages, disruptions in industrial production, water supply challenges, and broader global risks depending on the duration of the conflict.

Most Exposed Countries

Beyond India, several Asia-Pacific countries rely heavily on fertilizer flows passing through the strait, including South Korea, Thailand, and Australia.

Countries in the Americas are also dependent on these supplies, particularly the United States and Brazil.

In the event of supply disruptions, major importers—led by India and South Korea—would need to seek alternative sources to meet their ammonia demand.

Rising Global Production Costs

Producers with assets in other regions may ramp up output, but these facilities are typically located in higher-cost regions such as Europe. This could drive up food prices and increase global inflationary pressures.

Can Green Ammonia Be the Solution?

Some experts see green or e-ammonia—produced using renewable energy instead of fossil fuels—as a potential long-term solution to enhance supply security.

The concept previously gained attention as a way to strengthen Europe’s energy security following Russia’s invasion of Ukraine in 2022, but it has yet to achieve widespread adoption. Pilot projects are currently underway in China, though its ability to replace conventional fertilizers remains uncertain.

While green ammonia production is generally more expensive, recent tenders in India have shown prices close to those of conventional ammonia.

Recent agreements in this space include a deal between Uniper and AM Green to produce green ammonia in India for export to Europe, as well as offtake agreements between Yara International and ATOME Energy in Uruguay.

However, most of these projects are not expected to begin production before 2030, limiting their ability to ease near-term market pressures.

Scale of Trade at Risk

Global ammonia trade stood at approximately 10.9 million tonnes annually in 2025, down from 12.3 million tonnes in 2024. Around 15% of this trade could be affected if the Strait of Hormuz remains closed, particularly supplies originating from Saudi Arabia’s eastern coast.

Global urea trade reached about 50.8 million tonnes annually in 2025, of which roughly 10.6 million tonnes originate from countries impacted by the disruption, notably Saudi Arabia, Qatar, and the UAE.

Of these volumes, approximately 2.2 million tonnes were exported to India, underscoring its heavy reliance on Middle Eastern fertilizers.

Other major importers of urea from the region include Thailand, Australia, Brazil, and the United States.

Mounting Pressure on Fertilizer Trade

This is not the first shock to hit the global fertilizer market. Russian exports declined significantly following the war in Ukraine, yet still accounted for around 5% of global ammonia trade and 15% of urea exports in 2025.

Recent developments in the Middle East add another layer of risk to an already strained global fertilizer market, highlighting the concentration of supply among a limited number of producers and critical maritime chokepoints.