The Mexican peso benefited from the situation, which on Wednesday, April 8, managed to gain nearly 25 cents in the early morning, and closed the week at an exchange rate of 17.3186 units per US dollar. The immediate outlook for Treasury bonds is more uncertain, as the search for safe-haven assets conflicts with concerns about inflation. The Mexican peso could post losses after the failure of negotiations between the United States and Iran, as the closure of the Strait of Hormuz, announced by President Donald Trump, opens the possibility of the dollar rising due to increased demand for safe-haven assets. After the United States reported that, in their view, Iran refused to abandon its nuclear program, analysts predict that the end of negotiations will negatively affect markets, which will likely disappoint investors who increased their exposure to risk assets last week following the announcement of a ceasefire between the two countries. According to Bloomberg, the dollar price is expected to rise at the start of the market session on Monday, April 13, as well as an increase in oil prices and a general fall in stocks. The 'fragile' ceasefire between the United States, Israel, and Iran did not do the dollar any good, which lost 1.4 percent last week. Gold may experience a rebound. Analysts also pointed out that the magnitude of the market reaction could be limited if investors consider that the talks represent only a temporary setback for hopes of peace. Kyle Rodda, an analyst at Capital.com Inc, mentions that the key issue for Monday is whether markets interpret this as a temporary breakdown in negotiations or a structural collapse of the ceasefire framework. Oil crude markets will be guided by persistent restrictions on flows through the Strait of Hormuz. Obviously, the situation is quite fluid, so we will have to see if there are new developments in the talks when they resume or if the public rhetoric of the United States and Iran turns hostile again. Despite the dedollarization in different regions of the world and global tensions, the US dollar is considered one of the main safe-haven assets globally, according to Monex. This distinction will determine whether risk aversion fades quickly or is prolonged.
