Monday’s session was defined by an extraordinary intraday reversal in risk sentiment, as President Trump’s announcement of a five-day postponement to planned strikes on Iranian energy infrastructure triggered a sharp unwind of the geopolitical risk premium that had gripped markets since the weekend. WTI crude oil swung more than $15 per barrel in either direction before settling roughly 9% lower on the day, while equities pared deep early losses to close modestly higher and the U.S. dollar reversed its early safe-haven bid to close with a net bearish lean against most major currencies.
Check out the forex news and economic updates you may have missed in the latest trading session!
Forex News Headlines & Data:
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Broad Market Price Action:
Dollar Index, Gold, Oil, S&P 500, U.S. 10-yr Yield, Bitcoin Overlay – Chart Faster With TradingView
Monday delivered arguably the most volatile intraday session of the year, with virtually every major asset class reversing sharply at a single geopolitical headline.
WTI crude oil was the session’s defining instrument. The contract entered Monday already elevated near $97-98 per barrel, reflecting market anxiety over President Trump’s 48-hour ultimatum to Iran to reopen the Strait of Hormuz or face potential strikes on key infrastructure. Prices climbed further into the London session, briefly touching just above $101. The move reversed dramatically when Trump posted on social media that he was offering Iran a five-day reprieve, citing what he described as productive talks between the two sides toward a resolution of hostilities. WTI plunged to a session low of around $84.30 on the headline before rebounding into the U.S. afternoon. The partial recovery followed Iran’s state media flatly denying any negotiations had taken place, with Iranian officials going further to characterize the postponement as a retreat driven by their own warnings. Crude settled near $88.36, still down approximately 9.23% on the day.
The S&P 500 traced a similarly dramatic path. Futures were under moderate selling pressure through the Asian and early London sessions, with the index declining to lows near 6,434 ahead of the U.S. open. Trump’s announcement triggered a surge toward session highs near 6,695, representing gains of roughly 2.8% from the open, before the partial reversal in oil prices and Iran’s denial tempered optimism. The index settled near 6,580, up approximately 0.83% on the day. As one strategist noted, conditions for a rally were well-established given the historically elevated short positioning on U.S. equities entering the session.
Gold had a dramatic session of its own. The metal started the Asia session near $4,538 and fell sharply to a session low of approximately $4,099 as rising Treasury yields, a firmer dollar, and broad risk-off positioning ahead of the Iran deadline compressed price. Gold then surged back toward $4,513 on Trump’s de-escalation headline before reversing again as Iran denied talks, ultimately settling around $4,410, down roughly 2.08% on the day. The metal’s inability to hold its safe-haven bid even as geopolitical risk remained elevated likely reflected the competing headwinds from higher yields and a stronger dollar during the earlier part of the session.
Bitcoin was among the session’s standout performers. The cryptocurrency drifted near the $67,500 area during the Asian session before staging a sharp rally coinciding broadly with the Trump announcement near the London/U.S. open transition. BTC surged to a session high near $71,808 before pulling back to settle around $70,735, up approximately 3.87% on the day. The move possibly reflected a combination of improving risk appetite and Bitcoin’s growing role as an alternative store of value in geopolitically uncertain environments.
The 10-year U.S. Treasury yield reached a session high near 4.44% during the London session, reflecting the prevailing risk-off environment and inflation anxiety tied to the oil shock. Yields then fell sharply to a session low near 4.31% on Trump’s announcement, likely correlating with a partial retreat in hawkish Federal Reserve pricing as some of the oil-driven inflation risk premium unwound. The 10-year settled near 4.35%, down approximately 0.73% on the day.
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FX Market Behavior: U.S. Dollar vs. Majors
Overlay of USD vs. Majors – Chart Faster With TradingView
The U.S. dollar’s Monday session was a direct reflection of the day’s extraordinary geopolitical swing, moving from a safe-haven bid in the early hours to a sharp reversal and net bearish close against most major currencies.
During the Asian session, the dollar traded mostly sideways with a net bullish bias against the major currencies. Risk sentiment remained fragile as markets returned from the weekend with Trump’s Iran deadline front and center. The PBOC set its USD/CNY reference rate at 6.9041, above the 6.8928 estimate, suggesting continued managed yuan management amid the volatile backdrop. Commodity-linked currencies including AUD and NZD remained under pressure, with USD/JPY pushing back above 159.50 at points. The Korean won was also notable, reportedly weakening to its lowest level since March 2009. Broader FX moves were relatively contained given thin liquidity conditions.
The London session saw the dollar continue to trade net positive, extending its safe-haven bid as WTI crude climbed toward $101 and Treasury yields approached 4.44%. The turn came just ahead of the U.S. open, when a social media post from President Trump announcing the five-day reprieve and citing talks with Iranian representatives spiked volatility and arguably positive risk sentiment in a single moment. EUR/USD jumped from near 1.1490 to 1.1615 on the headline, while AUD/USD surged from the 0.6920 area to a session high near 0.7045. The dollar reversed broadly and sharply.
During the U.S. session, the dollar traded choppy and with a net bearish bias overall against the major currencies. Iran’s denial of any formal talks and its framing of Trump’s postponement as a capitulation introduced fresh uncertainty, causing markets to partially retrace across the board. Oil prices recovered from their lows, equity gains narrowed, and currency moves partially unwound. The dollar recouped some ground from its session lows but could not return to the levels seen before Trump’s announcement.
At the Monday close, the dollar was mixed but arguably net negative overall against the major currencies, posting only marginal gains against the Canadian dollar (USDCAD +0.04% to 1.37271) and the Australian dollar (USDAUD +0.18% to 1.42621). The residual strength against commodity-linked currencies likely reflected the still-elevated uncertainty around crude oil supply despite the day’s sharp price decline. Against the remaining majors, the dollar closed lower across the board: USDCHF -0.26% to 0.78626, USDEUR -0.37% to 0.86090 (EUR/USD near 1.1614), USDJPY -0.49% to 158.427, USDNZD -0.53% to 1.70550, and USDGBP -0.65% to 0.74460 (GBP/USD near 1.3430). Sterling’s relative outperformance at the close possibly reflected its sensitivity to improving risk appetite alongside any residual positioning adjustment after the weekend.
Upcoming Potential Catalysts on the Economic Calendar
- Australia S&P Global Manufacturing & Services PMI Flash for March 2026 at 10:00 pm GMT
- Japan CPI Growth Rate for February 2026 at 11:30 pm GMT
- Japan S&P Global Manufacturing & Services PMI Flash for March 2026 at 12:30 am GMT
- Swiss Current Account for December 31, 2025 at 8:00 am GMT
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Euro area HCOB Manufacturing & Services PMI Flash for March 2026 at 9:00 am GMT
- Germany HCOB Manufacturing & Services PMI Flash for March 2026 at 8:30 am GMT
- U.K. S&P Global Manufacturing & Services PMI Flash for March 2026 at 9:30 am GMT
- Canada CFIB Business Barometer for March 2026 at 11:00 am GMT
- U.K. CBI Distributive Trades for March 2026 at 11:00 am GMT
- U.S. ADP Employment Change Weekly for March 7, 2026 at 12:15 pm GMT
- Canada Manufacturing Sales Prel for February 2026 at 12:30 pm GMT
- U.K. BoE Pill Speech at 1:30 pm GMT
- U.S. S&P Global Manufacturing & Services PMI Flash for March 2026 at 1:45 pm GMT
- U.S. Richmond Fed Manufacturing Index for March 2026 at 2:00 pm GMT
- Euro area ECB Lane Speech at 3:45 pm GMT
- U.S. Money Supply for February 2026 at 5:00 pm GMT
Tuesday’s calendar is headlined by a wave of global Flash PMI readings, providing the first look at March business activity across major economies. Given Monday’s dramatic intraday swing in oil prices and the still-unresolved situation in the Strait of Hormuz, these PMI prints will be closely watched for any early signs that energy costs and geopolitical uncertainty are beginning to weigh on business confidence.
Japan’s CPI data overnight may draw additional attention given yen volatility and Japan’s sensitivity to imported energy inflation, particularly in light of Japan flagging FX intervention risk.
BoE Chief Economist Pill’s speech during the London session could offer fresh commentary on the Bank of England’s inflation and rate outlook as energy-driven price pressures add complexity to an already uncertain picture.
U.S. PMI and Richmond Fed data in the afternoon will provide further clues on domestic business conditions, while the second ECB Lane speech of the week may offer additional signals on whether the energy shock is shifting the European policy calculus.
Stay frosty out there, forex friends!
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