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Home/Markets & Investing/FED INTEREST RATE DECISION

Market Rally Signals Bet on Federal Reserve Rate Cuts

HT

Hugo Thorne

Fed interest rate decision · Apr 17, 2026

Market Rally Signals Bet on Federal Reserve Rate Cuts

Source: DojiDoji Data Terminal

Investors are wagering that the Federal Reserve will resume interest-rate cuts before the end of the year. This expectation follows a decline in oil prices and bond yields after Iran Foreign Affairs Minister Abbas Araghchi announced commercial vessels would be allowed to pass through the Strait of Hormuz.

Related Brief15h ago
currency exchange rates

Ringgit gains as US-Iran talks signal lower oil risk

The ringgit opened at 3.9510/9570 against the US dollar, up from the previous close of 3.9550/9600. The gain follows optimism that a second round of US-Iran talks will de-escalate conflict and reopen the Strait of Hormuz. This shift in sentiment pushed Brent crude prices to US$94.59 per barrel and West Texas Intermediate to US$90.76 per barrel.

The reopening of the Strait, triggered by a truce between Israel and Lebanon, eases the oil shock that has weighed on the global outlook since President Donald Trump initiated the conflict seven weeks ago. The move was subsequently confirmed by Trump.

Related Brief2d ago
forex

Oil Price Drops Signal Potential Federal Reserve Rate Cuts

The EUR/USD exchange rate reached its highest point since February 27. The pair has risen above the key resistance level at 1.1640. This rally is driven by investor hope that an agreement will be reached before the two-week ceasefire ends, which would allow oil to flow from the Gulf region. Brent and West Texas Intermediate (WTI) prices have fallen to $95 and $92, respectively, despite the US blockade of the Strait of Hormuz preventing Iranian oil shipments. Oil flowing from the Gulf region would lower energy prices, raising the possibility of Federal Reserve interest rate cuts. The next target for the EUR/USD pair is the psychological level at 1.2000.

Equity markets responded with a sharp rebound. The S&P 500 advanced 0.8% to another record, while the Dow Jones Industrial Average climbed 1.4% and the Nasdaq 100 added 0.7%.

Related Brief3d ago
foreign exchange

EUR/USD hits 1.1770 as diplomatic hopes weaken dollar

EUR/USD climbed to 1.1770, its highest point since early March, extending an eight-day winning streak as investors shift toward riskier assets. The move reflects growing optimism that diplomatic channels with Iran remain open, despite no formal breakthrough. US Vice President JD Vance struck a cautiously optimistic tone, stating that meaningful progress has been made in negotiations—a sentiment enough to erode demand for the safe-haven US dollar. At the same time, uncertainty over the Federal Reserve’s next interest rate move continues to weigh on the dollar, which is trading near its lowest level since early March. Yet the rally faces constraints. The U.S. Navy has begun enforcing a blockade in the Strait of Hormuz, prompting Iran to threaten all ports in the Persian Gulf and the Gulf of Oman. These developments keep geopolitical risk elevated. Fears that the current ceasefire could collapse, reigniting conflict, are tempering aggressive bets on further euro gains. Still, the fundamental backdrop supports the euro’s momentum, fueled by diminishing dollar appeal and sustained buying interest in the single currency.

According to Paul Stanley, chief investment officer at Granite Bay Wealth Management, this is the first Friday session in over a month without the typical risk-off positioning heading into the weekend. This shift suggests the recent market correction has likely run its course.

Related Brief15h ago
currency markets

The Dollar's Eight-Day Slide Reflects Investor Uncertainty Over Iran Peace Talks

The dollar index dropped to 98.06 on Wednesday, marking its eighth consecutive daily loss. The decline has lasted longer than any since December 3, when markets were pricing in at least two rate cuts from the Federal Reserve this year. The losing streak reflects growing uncertainty among investors about the trajectory of US-Iran peace talks and the economic fallout from the conflict. The Strait of Hormuz, a vital shipping lane for one-fifth of global oil and gas shipments, remains blocked, contributing to a surge in energy prices and renewed concerns about inflation and global growth. The European Central Bank is delaying rate hikes, citing the unresolved uncertainty around the conflict. Meanwhile, the euro rose 0.03% against the dollar, signaling a shift in risk appetite. The dollar’s weakness has been tempered by strong demand for US assets and the diminishing likelihood of near-term rate cuts.

The S&P 500 has risen in all but one session this month. The Nasdaq 100 is on track for a 13-day winning streak, its longest since 2013.

Related Brief3d ago
monetary policy

Oil Price Spike Erodes Probability of December Federal Reserve Rate Cut

Average Canadian households will spend an additional $500 per year at the pump. This shift in spending leaves consumers with less money for other goods and other services. The price surge follows a U.S. Navy blockade of ships entering or departing Iranian ports in the Strait of Hormuz, ordered by President Trump after 21 hours of negotiations in Pakistan failed to reach an agreement. WTI crude oil reached $105.339 per barrel and Brent crude oil reached $103. Oil prices influence the CPI primarily through energy and transportation sectors, which account for less than 13% of the CPI. While these spikes increase the risk of energy-fueled inflation spikes globally, they have reduced the probability of a U.S. rate drawdown of at least 25 basis points at the Federal Reserve's Kingdom gathering in December to 16%, down from 21% a day prior.

Fed interest rate decision

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