Forex week in review 16/2026: blockade, then a Hormuz reprieve

Last week the dollar lost its war premium when a two-week ceasefire was agreed. This week tested whether that move could survive the next round of bad news, and then got an unexpected piece of good news at the end. The result was a third straight weekly fall for the US Dollar Index, which closed at 98.10, down 0.56%, according to RTTNews. The Australian dollar led the majors again, up 1.5%.

The shape of the week matters more than the net change. Almost every dollar pair made its dollar-positive extreme on Monday and its dollar-negative extreme on Friday. That pattern, a straight line from fear to relief, tells you the week was driven by a single story: oil and the Strait of Hormuz.

The weekend that set up Monday

The weekend between the two weeks was eventful. US and Iranian delegations met in Islamabad on Saturday 11 April. According to the Irish Examiner's report, the talks lasted 21 hours and ended early on Sunday without an agreement. Vice President JD Vance said Iran had refused to give "an affirmative commitment that they will not seek a nuclear weapon" and described the US proposal as its "final and best offer".

On Sunday, President Trump announced a naval blockade. US Central Command said its forces would begin blocking all maritime traffic entering and leaving Iranian ports at 10am Eastern on Monday 13 April. Ships heading to and from non-Iranian ports through the strait were not the target, but in practice traffic through Hormuz was already running far below normal.

For anyone holding positions over the weekend, this is the textbook case of gap risk: two major pieces of news while the market was closed.

The week day by day

Monday 13 April: oil back above $100

Brent rose $6.52, or 6.9%, to $101.72 a barrel by early afternoon in London, with US WTI up about 7.2% at $103.55, according to Reuters reporting carried by GV Wire. The same report noted that some physical crude grades were trading around record highs of about $150 a barrel, a sign of how tight prompt supply had become. OPEC cut its second-quarter world oil demand forecast by 500,000 barrels a day in its monthly report the same day.

The dollar made its high for the week. The Dollar Index reached 99.18, EUR/USD dipped to 1.1662, GBP/USD to 1.3380 and AUD/USD to 0.6984, while USD/JPY hit 159.87, all on Monday, according to RTTNews. Yet none of these moves went anywhere near reversing the previous week's ceasefire rally. The market treated the blockade as a setback within a negotiation rather than a return to full-scale war.

Tuesday 14 April: a soft PPI

US producer prices for March rose 0.5% on the month, the same as the previous reading and well below the 1.1% the market had expected, according to RTTNews. Given that oil spiked in March, a much smaller increase in producer prices than forecast was a mild relief for anyone worried that the Fed would have to tighten. Oil gave back part of Monday's jump as the market waited to see how strictly the blockade would be enforced.

Wednesday 15 April: Beige Book and waiting

The Fed published its Beige Book survey of regional conditions and there were speeches from Fed, ECB and Bank of England officials, but nothing that redirected the market. The focus stayed on the Gulf.

Thursday 16 April: data from the UK, Australia and China

The UK's February GDP figure was the main European release. Output grew 0.5% on the month against a forecast of 0.1%, with January revised to 0.1%, according to RTTNews. A strong number, but it describes the economy before the oil shock fully hit, so its effect on sterling was limited.

Australia's March labour report showed job growth slowing, with the unemployment rate unchanged at 4.3%. China published first-quarter GDP and March activity data. And in the Middle East, a 10-day ceasefire between Israel and Lebanon took effect, which turned out to be the key to Friday.

Friday 17 April: Hormuz declared open

Iran's foreign minister, Abbas Araghchi, said on Friday that the Strait of Hormuz was open to commercial vessels for the remainder of the Israel–Lebanon ceasefire. Oil collapsed. By 10:50am in New York, Brent was down $12.87, or 12.95%, at $86.52 after a low of $86.09, and WTI was down $13.50, or 14.26%, at $81.19, according to Reuters reporting carried by GV Wire. Both hit their lowest levels since 10 March. President Trump said the US was "very close to making a deal with Iran" and that Iran had agreed never to close the strait again. Axios reported progress on a three-page memorandum of understanding.

Not everything was resolved. A US official told Reuters that the military blockade of Iran, involving more than 10,000 personnel, remained in effect.

The dollar made its lows: the Dollar Index touched 97.63, EUR/USD 1.1849, GBP/USD 1.3601 and AUD/USD 0.7223, and USD/JPY dropped to 157.58. But by the close, each pair had given back a good part of those moves. EUR/USD finished at 1.1764, about 85 pips below its high. That late retracement is a reminder that markets often trim a move into a weekend when the underlying situation is still unresolved.

RTTNews put the week's oil change at June Brent $90.38 on Friday versus $95.20 a week earlier.

Pair by pair

EUR/USD: +0.38%

A modest net gain hides a 187-pip range from 1.1662 to 1.1849. That is a wide range for a week that ended up so little changed, and it is typical of headline-driven markets. If you are sizing positions for this kind of environment, the range matters more than the net change, because your stop has to survive the swings in between. Our position sizing guide shows how to adjust lot size when the distance to your stop gets wider.

GBP/USD: +0.41%

Cable traded from 1.3380 to 1.3601 and closed at 1.3517. The February GDP beat gave sterling some domestic support, but the pair mostly tracked the dollar side of the story.

AUD/USD: +1.50%

The Aussie climbed from 0.7062 to 0.7168, with a high of 0.7223. Two weeks in a row it has been the best of the majors tracked here, consistent with its role as a proxy for global risk appetite. A softer Australian jobs report did not stop it.

USD/JPY: −0.41%

USD/JPY traded from 159.87 down to 157.58 and closed at 158.64. RTTNews attributed some of the yen's firmness to hawkish hints from the Bank of Japan governor. Cheaper oil also helps the yen because Japan imports almost all of its energy. Still, the pair stayed within sight of 160, a level the market regards as sensitive for Japan's Ministry of Finance.

Gold: a fourth weekly gain

Reuters reported spot gold at $4,784.72 on Friday morning, up about 1% on the week and heading for a fourth straight weekly gain. The same report made a striking point: gold had fallen more than 8% since the war began in late February, because higher energy prices had pushed expectations of rate cuts out of reach. Traders saw only a 27% chance of a Fed cut by December, compared with expectations of two cuts this year before the war.

Why the yen is not acting as a haven

Two weeks in, it is worth spelling out why USD/JPY has stayed near 158–160 through a war, a ceasefire, a blockade and a reopening.

The first reason is the interest-rate gap. US short-term rates are in a 3.50–3.75% range; the Bank of Japan's policy rate is 0.75%. A trader who is long USD/JPY earns that difference every night through positive swap (and pays it if short). That income is why so many positions are long dollar and short yen, and why the pair tends to grind higher when nothing dramatic is happening. Our guide to swap and overnight financing explains how brokers calculate this, including why Wednesday's charge is usually tripled.

The second reason is energy. Japan imports nearly all its oil and gas. When oil spikes, Japan's import bill rises, which means more yen being sold to buy dollars. That is the opposite of what a haven needs.

Put those together and you get a currency that strengthens a little when oil falls, but does not get the classic risk-off bid. This is a good example of why rules like "the yen rises in a crisis" need to be checked against current conditions rather than applied automatically.

PPI, CPI and why the order matters

Producer prices measure what businesses receive for their output; consumer prices measure what households pay. In an energy shock, the increase usually shows up first at the producer level (fuel, transport, chemicals, plastics) and feeds through to consumer prices over the following months.

That is why the market cared about Tuesday's PPI even though it had seen CPI the previous Friday. A producer-price increase of 0.5% instead of the 1.1% expected suggested less pressure building in the pipeline than feared. It does not rule out more consumer inflation later; it only means the first read was gentler than forecast. Our guide to how economic data moves forex explains why the surprise against consensus is what moves price.

Trading through blockades and reopenings

This was another week in which the biggest moves came from announcements with no scheduled time: a blockade announced on a Sunday and a strait reopening announced on a Friday morning.

A few practical points for anyone trading in conditions like these:

• Weekend risk is real. The market closed on Friday 10 April with a ceasefire in place and opened on Monday 13 April with a blockade. Prices can open well away from where they closed, and stop-losses are filled at the first available price, not at your level. See slippage explained.
• Ranges widen before trends form. EUR/USD had a 187-pip range for a 44-pip net gain. If your stop is placed too close to normal noise, a week like this will take it out on the way to going your way. Our guide on where to put a stop-loss covers volatility-based stops.
• Leverage magnifies headline risk. Consider an illustrative example: a trader with a US dollar account of $5,000 risking 2% ($100) with a 30-pip stop on EUR/USD would trade about 0.33 standard lots, because a standard lot is worth $10 per pip and $100 divided by 30 pips is about $3.33 per pip. The same $100 risk with a 90-pip stop, more realistic for this week's ranges, means about 0.11 lots. Same risk, very different exposure. The leverage and margin guide covers why the margin your broker requires is not the same thing as the risk you are taking.

None of this changes the base rate: most retail CFD accounts lose money, and the proportion in brokers' published disclosures commonly sits between about 61% and 89%. Weeks with large, unscheduled moves are a big part of why.

What this week teaches

• Watch the extremes, not just the close. The dollar's high was on Monday and its low on Friday across every pair. That pattern tells you one story drove the whole week.
• A setback is not the same as a reversal. The blockade pushed oil back above $100, but the dollar did not return to its pre-ceasefire levels. The market had already decided the direction of travel was towards de-escalation.
• Producer prices lead consumer prices. PPI can tell you something about the next CPI print, which is why the market watched it closely.
• Haven status depends on the economics. The yen did not behave like a haven because of Japan's energy imports and its low interest rates.
• Weekends carry risk. Political events do not wait for Monday's open.

Scheduled next week (20–24 April)

Events only. Times and consensus figures are available on most economic calendars.

• Monday 20 April: China loan prime rates; Canadian CPI for March; New Zealand first-quarter CPI; remarks from ECB President Lagarde.
• Tuesday 21 April: UK labour market report; German and euro area ZEW sentiment; US retail sales for March; US Senate Banking Committee confirmation hearing for Fed chair nominee Kevin Warsh.
• Around Tuesday–Wednesday: the two-week US–Iran ceasefire agreed on 7 April is due to run out.
• Wednesday 22 April: UK CPI for March; euro area consumer confidence.
• Thursday 23 April: flash PMIs for April across the euro area, UK, US and Japan; US jobless claims.
• Friday 24 April: Japan CPI for March; UK retail sales; German Ifo survey; final University of Michigan sentiment.

Sources

• RTTNews: Dollar extended losses last week on hopes of US-Iran peace deal (week ended 17 April)
• Irish Examiner: JD Vance says no deal reached in talks
• ABC7: US blockade of Iranian ports to begin Monday
• GV Wire (Reuters): Oil jumps nearly 7% to above $100 ahead of US blockade
• GV Wire (Reuters): Oil falls by 13% after Iran declares Strait of Hormuz open
• Arab News (Reuters): Gold holds steady, eyes fourth weekly gain
• Newsquawk weekly economic calendar, 13–17 April 2026
• Newsquawk weekly economic calendar, 20–24 April 2026