Pakistan asks Trump to extend Iran deadline by two weeks
Pakistan requested on Tuesday a two-week extension of the deadline set by US President Donald Trump for Iran to reach a deal or reopen the Strait of Hormuz. According to a senior Iranian official, Tehran is “positively reviewing Pakistan's request for a two-week ceasefire.” At the same time, the White House is aware of Pakistan's proposal, suggesting a response will follow.
Pakistan’s Prime Minister Shehbaz Sharif posted on X, “To allow diplomacy to run its course, I earnestly request President Trump to extend the deadline for two weeks. Pakistan, in all sincerity, requests the Iranian brothers to open Strait of Hormuz for a corresponding period of two weeks as a goodwill gesture.”
Trump’s deadline on Iran to reopen the Strait of Hormuz will end on Tuesday at 8:00 PM Eastern Time (00:00 GMT on Wednesday), as Washington presses Tehran to end the blockade of Gulf Oil.
The Pakistan Prime Minister added that the ceasefire is needed “to allow diplomacy to achieve conclusive termination of war.”
Reaction on the headline
- The US Dollar Index (DXY), which tracks the performance of the buck's value against a basket of six currencies, is tumbling over 0.34% at 99.65, while US equities pared some of their earlier losses and turned green.
- Gold price (XAU/USD) soared over 1%, back above the $4,700 threshold, sponsored by the fall in Oil prices, mainly WTI.
- WTI turned negative on the day, after reaching a daily high past $106.60 a barrel, testing levels below the $100 mark at the time of writing.
(This story was corrected on April 8 at 08:51 GMT to say that the WTI daily high was above $106.60, not $117.50.)
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
