The recent rebound in risk appetite has pushed currencies as if the Middle East shock is already fading. We think that is too complacent: as long as Hormuz remains closed, oil, inflation and policy divergence will continue to dominate currency markets.

For now, the economic damage caused by the war in Iran appears to be manageable as long as oil prices remain below $120 per barrel. Above that level, the consequences could quickly become more severe. But will the ceasefire lead to a lasting agreement? And what other factors are currently driving the direction of currencies, interest rates, and shares?

As geopolitical tensions rise and economic rivalry intensifies, gold stands out as the ultimate safe haven. Despite short-term volatility, structural forces - from shifting alliances to mounting public debt - will likely push prices significantly higher over time..