Forex week in review 17/2026: Hormuz shuts again and the dollar steadies

Last Friday the Strait of Hormuz was declared open and oil fell 13% in a morning. By Saturday it was shut again. This week was about the market working out that the relief rally had run ahead of reality. The US Dollar Index rose 0.44% to 98.53, according to RTTNews, ending a three-week losing streak. USD/JPY climbed back to 159.38, and gold had its first weekly loss in five weeks.

The moves were small compared with the previous fortnight, and that is a point worth dwelling on. Oil went from the mid-$80s back above $100, the ceasefire came within hours of expiring, and the US and Iran both seized ships. Yet EUR/USD fell only 0.36% on the week. Markets had already priced a lot of bad news in March; this week they partly unwound an over-optimistic reaction rather than repricing the war from scratch.

The weekend: a one-day reopening

Iran's declaration on Friday 17 April that the strait was open to commercial shipping lasted barely a day. On Saturday Tehran announced the strait was closed again, saying it would stay shut until the US lifted its blockade of Iranian ports. Kpler recorded two attacks on vessels that day, according to The National. On Sunday, US forces disabled and seized an Iranian-flagged cargo ship heading for Bandar Abbas in breach of the blockade.

The National, citing ship-tracking firm Kpler, counted 36 crossings on Saturday, six on Sunday and eight on Monday, compared with about 140 a day before the war began on 28 February. More than 700 ships were stranded in the Gulf, and freight rates had risen by anything from 50% to over 200% depending on the segment.

The week day by day

Monday 20 April: a quieter open than expected

Despite the weekend, the currency reaction on Monday was muted. In fact the Dollar Index posted its weekly low of 98.01 on Monday and USD/JPY its low of 158.55, according to RTTNews, while GBP/USD made its weekly high of 1.3546. Part of the explanation is that Friday's dollar sell-off had already been trimmed by the close. Canada and New Zealand published first-quarter and March inflation data, and China set its loan prime rates.

Tuesday 21 April: the ceasefire deadline and Warsh

Tuesday had three stories at once.

The first was the ceasefire. The two-week truce agreed on 7 April was due to lapse. A second round of talks in Pakistan was called off hours before expiry, and Vice President Vance's trip to Islamabad was put on hold. President Trump said the ceasefire would remain in place until Iranian leaders presented a "unified proposal" and talks concluded, but that the US naval blockade would continue. Brent rose as high as $101.15 before settling back, and was quoted at $99.67 in post-settlement trade, up 4.4% on the day, while WTI settled 2.8% higher at $92.13, according to The Star's Reuters-based report.

The second was the Fed. Kevin Warsh, nominated to succeed Jerome Powell as Fed chair when Powell's term ends on 15 May, appeared before the Senate Banking Committee. He said the president had "never once" asked him to commit to a particular interest-rate decision and that he "would never agree" to do so. He also said four FOMC meetings a year was the legal minimum and "four is not enough", declined to promise a press conference after every meeting, and said he preferred trimmed-mean measures of underlying inflation. Republican Senator Thom Tillis repeated that he would not vote for the nominee until the Justice Department dropped its investigation into Powell.

The third was UK data. The unemployment rate for December to February fell to 4.9%, down 0.2 percentage points on the previous quarter, according to the ONS figures summarised by the Scottish Government, which RTTNews described as lower than expected. US retail sales for March were also published. EUR/USD made its weekly high of 1.1793 and AUD/USD its high of 0.7187, both on Tuesday.

Wednesday 22 April: UK inflation and more seizures

The ONS reported UK CPI inflation at 3.3% in the year to March, up from 3.0% in February and in line with expectations. Prices rose 0.7% on the month. Motor fuels made the largest upward contribution, and domestic heating oil prices rose 90.5% in the month. Core CPI, which excludes energy, food, alcohol and tobacco, eased to 3.1% from 3.2%, while services inflation rose to 4.5% from 4.3%.

Also on Wednesday, Iran said it had captured two cargo ships, the MSC Francesca and the Epaminondas, accusing them of trying to cross without permits.

Thursday 23 April: the dollar's best day

The flash PMI surveys for April were published across the major economies, but the Gulf dominated again. The US said it had boarded another tanker in the Indian Ocean, Iranian state television showed commandos boarding the MSC Francesca, and President Trump said he had ordered the Navy to "shoot and kill" Iranian boats laying mines in the strait. Brent was up 0.5% at $102.40 on Thursday, according to Reuters reporting carried by GV Wire. An Iranian source said Iran could consider attending talks in Pakistan only if the blockade were lifted and its seized ships released.

Thursday was the dollar's strongest day. The Dollar Index reached 98.94, EUR/USD fell to 1.1669, GBP/USD to 1.3446 and AUD/USD to 0.7111, and USD/JPY reached 159.86.

Friday 24 April: the Powell probe ends

On Friday, US Attorney for the District of Columbia Jeannine Pirro said her office was closing its criminal investigation into Jerome Powell, which concerned the renovation of the Fed's headquarters, and handing the matter to the Fed's inspector general. She said she would not hesitate to restart it if the facts warranted. The White House said the investigation continued under a different authority. The move removed an obstacle to the Senate confirming Warsh, and RTTNews said the dollar slipped after the news. Japan published March CPI, which RTTNews said showed core inflation accelerating but still below the Bank of Japan's target. The Dollar Index finished at 98.53.

Pair by pair

EUR/USD: −0.36%

From 1.1764 to 1.1722, with a 124-pip range between 1.1793 and 1.1669. The euro area is heavily exposed to energy prices, so oil back above $100 and the strait closed again is a straightforward headwind. The move was modest because the market was correcting an overshoot, not pricing a new escalation.

GBP/USD: +0.12%

Sterling was the only one of the four majors here to gain on the dollar, rising from 1.3517 to 1.3533. The falling unemployment rate and services inflation at 4.5% both argue against the Bank of England cutting soon, which supports the pound relative to the euro. For a beginner, the key idea is that a currency is supported when its central bank is expected to keep rates higher for longer. Our guide to central banks and interest rates explains this rate-differential logic.

AUD/USD: −0.24%

After two weeks as the best major, the Aussie slipped from 0.7168 to 0.7151. Its weekly range of 0.7111 to 0.7187 was narrow by recent standards. When risk appetite wobbles, the Aussie is often the first to give back gains.

USD/JPY: +0.47%

The pair rose from 158.64 to 159.38 and touched 159.86 on both Thursday and Friday. Higher oil is bad for the yen, and the Bank of Japan's next meeting on Tuesday 28 April was approaching with markets expecting no change. The closer the pair gets to 160, the more traders talk about the possibility of Japanese intervention.

Gold: first weekly loss in five

InvestMacro, carrying RoboForex analysis, put gold's weekly decline at nearly 3%, with the price below $4,700 on Friday. The drivers were the same ones that had hurt gold in March: higher oil, more inflation risk, and therefore less chance of interest-rate cuts. Gold pays no interest, so the longer rates are expected to stay high, the more it costs to hold.

Why the Fed chair story matters to currencies

It may seem odd that a criminal probe into a Fed chair's building renovation is a currency driver. The reason is central-bank independence.

Currency markets care about the expected path of interest rates. If investors believe a central bank can be pushed into cutting rates for political reasons, they demand a higher return for holding that currency, or simply hold less of it. So anything that looks like political pressure on the Fed can weaken the dollar, and anything that appears to reduce that pressure, or clears the way for an orderly handover, can matter too.

This week had both kinds of signal. Warsh stressed independence in his hearing. On Friday the probe was handed to the inspector general, removing a hurdle to his confirmation. RTTNews reported that the dollar slipped after Friday's news. As with all single-day moves, it is hard to separate one headline from everything else that happened, so treat any precise attribution with caution.

Reading the UK inflation numbers

The UK release is a good worked example of why traders look below the headline.

• Headline CPI rose from 3.0% to 3.3%. That was expected, and the driver was fuel.
• Core CPI fell from 3.2% to 3.1%. That suggests the energy shock had not yet spread into broader prices.
• Services CPI rose to 4.5% from 4.3%. Services inflation is closely watched by the Bank of England because it reflects wages and domestic demand rather than imported energy.

So the same release contained a reason for the Bank of England to worry (services) and a reason for comfort (core). When a release has mixed components and the headline matches forecasts, the currency reaction is usually small, which is what happened to sterling on Wednesday. Our guide on how economic data moves forex goes through consensus, actual and previous figures in more detail.

Trading lessons from a corrective week

A corrective week is one in which the market partly reverses a previous sharp move. They are often frustrating for traders who joined the earlier move late.

Consider an illustrative example. Suppose a trader bought EUR/USD near Friday 17 April's high of 1.1849 after seeing the strait reopen, with a stop 50 pips below at 1.1799. The pair closed that Friday at 1.1764, already through the stop. Even a 100-pip stop at 1.1749 would have been tested by the following week's Thursday low of 1.1669. Buying after a news spike means paying the most extreme price of the move, and spikes on unscheduled news are often partly reversed.

Three things help:

• Wait for the second move. After a headline spike, the range that forms over the next session or two usually tells you more than the first candle. Our guide on support and resistance explains how to mark those levels.
• Place stops where the idea is wrong, not where the pain stops. Our stop-loss placement guide covers structure-based and volatility-based stops.
• Keep size small when the news can flip overnight. The position sizing guide shows how to reduce lot size when stops need to be wider.

Finally, the uncomfortable statistics: brokers' published disclosures commonly show between about 61% and 89% of retail CFD accounts losing money, and ESMA's 2018 review found 74–89%. Chasing headline spikes is one of the behaviours behind those numbers. Our guide on trading psychology covers the fear of missing out that drives it.

What this week teaches

• Relief rallies can overshoot. One day of an open strait produced a 13% oil fall; a weekend reversed much of the logic. Price had run ahead of facts.
• Small moves can carry big news. The ceasefire nearly expired, ships were seized and oil rose above $100, yet EUR/USD moved less than 0.4%. Much was already priced.
• Central-bank independence is a currency issue. Political pressure on a central bank affects how investors value its currency.
• Look beneath the headline. UK core inflation fell while services inflation rose. Both mattered.
• Chasing spikes is costly. Entries at news-driven extremes are often the worst prices of the move.

Scheduled next week (27 April–1 May)

This is one of the busiest central-bank weeks of the year. Events only; no view on outcomes.

• Tuesday 28 April: Bank of Japan policy decision and Governor Ueda's press conference; US consumer confidence.
• Wednesday 29 April: Federal Reserve decision and Chair Powell's press conference, expected to be his last as chair; Bank of Canada decision; Australian CPI for March; German and Spanish flash inflation; US durable goods.
• Thursday 30 April: ECB decision and President Lagarde's press conference; Bank of England decision and Monetary Policy Report; euro area flash inflation for April and first-quarter GDP; US first-quarter GDP (advance) and March PCE inflation; China PMIs.
• Friday 1 May: Tokyo CPI; final manufacturing PMIs; US ISM manufacturing. Many European markets are closed for Labour Day, and Japan is in its Golden Week holiday period, so liquidity may be thin.

Sources

• RTTNews: Dollar rebounded last week amidst persisting Middle East uncertainty (week ended 24 April)
• The National: Strait of Hormuz shipping traffic at standstill as US boards Iranian vessel
• The Star (Reuters): Brent futures retreat on Iran ceasefire extension
• GV Wire (Reuters): Iran shows off its control over strait after collapse of peace talks
• The Spokesman-Review (Reuters): Five things learned at Fed nominee Warsh's Senate hearing
• 14 News (AP): Justice Department drops criminal investigation into Jerome Powell
• ONS: Consumer price inflation, UK, March 2026
• Scottish Government: Labour market trends, April 2026 (UK unemployment estimates)
• InvestMacro: Gold falls nearly 3.0% over the week
• Newsquawk weekly economic calendar, 20–24 April 2026
• Newsquawk weekly economic calendar, 27 April–1 May 2026