Pound surges after Iran-US ceasefire deal as oil costs tumble

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Your help makes all of the distinction. Learn extra The pound headed for its largest single-day achieve in three weeks on Wednesday, following an settlement between the USA and Iran for a two-week ceasefire.

This growth ignited a wave of optimism throughout world markets, resulting in a major drop in oil costs.

Sterling climbed 1 per cent on the day to $1.342, marking its highest degree since 23 March and inserting it simply 0.4 per cent beneath its worth previous to the battle’s onset in late February.

Brent crude futures plummeted by as a lot as 16 per cent in early buying and selling, as traders welcomed the prospect of a sustained truce that would permit the resumption of marine site visitors by the Strait of Hormuz, which Iran has successfully blocked because the conflict started.

<img src="https://static.independent.co.uk/2026/04/08/8/12/SEI292313208.jpg" srcset="https://static.independent.co.uk/2026/04/08/8/12/SEI292313208.jpg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2026/04/08/8/12/SEI292313208.jpg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="The ceasefire was confirmed by Trump late on Tuesday evening" class="sc-1mc30lb-0 ggpMaE inline-gallery-btn"/> The ceasefire was confirmed by Trump late on Tuesday night (Reuters) The ceasefire was introduced late on Tuesday night time within the US after Donald Trump had beforehand declared “an entire civilization will die tonight, by no means to be introduced again,” if a truce was not agreed.

The shift in market sentiment additionally noticed cash markets reduce their expectations for rate of interest hikes by main central banks this 12 months.

Beforehand, merchants had priced in at the least two price will increase from the Financial institution of England this 12 months; this has now been revised to only one hike in 2026, with solely an out of doors probability of a second.

Towards the euro, the pound was marginally stronger, with the one European foreign money buying and selling down 0.2 per cent at 87.12 pence.

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ING strategist Chris Turner famous this was considerably stunning, on condition that expectations for the European Central Financial institution haven't been reduce as aggressively as for the BoE, which theoretically ought to have supplied a elevate to the euro.

"One might need thought EUR/GBP could possibly be buying and selling somewhat larger have been Financial institution of England coverage tightening to be priced out extra shortly than that of the ECB. Nonetheless, EUR/GBP continues to commerce over 0.8700 and will discover good help on dips," he stated.