The Canadian dollar stabilized near the 1.37 per USD mark, hovering near two-month lows as a shift toward diplomacy in the Middle East neutralized the safe-haven bid for the greenback while simultaneously cooling the global energy rally. President Trump’s decision to postpone military strikes on Iranian infrastructure for five days triggered a collapse in energy prices and eased the geopolitical premium previously embedded in the Loonie. While the Bank of Canada and the Federal Reserve both maintained a cautious stance on inflation, the domestic currency found a technical floor as US Dollar demand softened following disappointing American construction and manufacturing data. These factors effectively countered the loss of oil-led support, as Federal Reserve officials downplayed the necessity of near-term rate hikes despite the stagflationary risks cited by Chicago Fed President Austan Goolsbee.

Canadian Dollar Steady Near 2-Month Lows

The Mexican peso appreciated toward 17.7 per US dollar as a broad improvement in global risk appetite and a sharp retreat in the greenback provided a reprieve for emerging market assets. This recovery was largely driven by a significant narrowing of the dollar's safe-haven premium after President Trump postponed military strikes on Iranian energy infrastructure for five days following productive negotiations. Locally, the peso found additional support from Mexican retail sales rising a strong 5% annually in January, a figure that significantly beat market expectations and highlighted domestic economic resilience despite elevated borrowing costs. While the peso  previously hit a three-month low of 18.08 on fears of a Strait of Hormuz closure, the easing of geopolitical tensions triggered a collapse in Brent crude prices that cooled the inflationary outlook. These developments reinforced the Bank of Mexico's hawkish stance.

Mexican Peso Rebounds on Risk Appetite

The Brazilian real surged toward 5.22 per US dollar after President Donald Trump's decision to postpone strikes on Iranian energy infrastructure triggered a sharp reversal in global risk sentiment. This recovery followed a period of intense pressure where the currency weakened toward 5.3 as investors reacted to record Treasury interventions and soaring oil prices. Domestic markets are also navigating a leadership transition with the swearing-in of Dario Durigan as Finance Minister who pledged to maintain fiscal continuity following Fernando Haddad's departure. Despite this relief the outlook for interest rates has turned increasingly hawkish with year-end 2026 Selic expectations rising to 12.5% as persistent price pressures weigh on the Central Bank's easing cycle.

Brazilian Real Rebounds Sharply

The South African rand rose to around 16.9 per USD, pulling away from recent four-month lows of 17.2 per USD, as risk aversion moderated after US President Trump said the US would postpone strikes on Iranian power plants for five days. The decline in key precious metals, particularly gold, also eased. The rand has faced increased volatility since the onset of the Middle East crisis in late February, pressured by global risk aversion and oil price swings. The main concern is that a prolonged war and higher oil prices could push inflation higher in energy-importing South Africa. Attention turns to the upcoming SARB's decision, the second of the year, with a hold widely anticipated. The Iran conflict has complicated the policy outlook, intensifying the balancing act between supporting growth and maintaining inflation near the 3% target. Before the recent shock, inflation expectations were showing signs of becoming better anchored; they are now expected to rise in the near term.

South African Rand Recovers

The British pound recovered to $1.34, reversing earlier declines, after President Trump delayed US strikes on Iran for five days, citing "very good and productive" negotiations with Tehran. The announcement temporarily reduced fears of a Middle East escalation, just ahead of a 48-hour US deadline for Iran to reopen the Strait of Hormuz. Despite the diplomatic reprieve, markets still price in four BoE rate hikes this year, a stark reversal from pre-conflict expectations of two cuts, as policymakers focus on taming inflation amid the UK’s vulnerability to energy supply shocks.

Sterling Bounces to $1.34 as Trump-Iran Talks Ease Tensions

The dollar index slipped to around 99.6 on Monday after President Donald Trump said he had instructed the Department of Defense to postpone all planned strikes on Iranian energy infrastructure for five days, citing productive discussions with Iran over the past two days. While Tehran has not confirmed the talks, the comments suggest a possible opening toward de escalation. Oil prices dropped sharply following the announcement, with WTI falling more than 9% below $90 per barrel and Brent sliding over 13% to under $97. Despite the pullback, earlier gains in energy costs have continued to fuel inflation concerns, reducing expectations for near term Federal Reserve rate cuts and prompting some traders to price in a potential hike later this year. Major central banks including the Fed, ECB, BOE and BOJ have all held rates steady while signaling readiness to tighten policy further if inflation persists.

DXY Eases as Trump Delays Iran Strikes

The euro reversed early losses to steady at $1.157 after President Trump announced a five-day delay in planned US strikes on Iran’s energy infrastructure, calling recent talks "very good and productive" in a Truth Social post. The move temporarily eased fears ahead of today’s 48-hour US deadline for Iran to reopen the Strait of Hormuz, a flashpoint after Trump’s weekend threat of retaliatory strikes if Tehran failed to comply. Iran had vowed to target Gulf energy and desalination plants, risking wider conflict. Despite the reprieve, markets still anticipate three ECB rate hikes in 2026, following last week’s decision to hold rates while raising inflation forecasts and cutting growth outlook amid escalating Middle East risks.

Euro Recovers as Trump Delays Iran Strikes

The South African rand continued to weaken to 17.2 per USD, the lowest since November 2025, as heightened geopolitical tensions between the US and Iran spurred risk-off sentiment. At the same time, key precious metals, notably gold, fell, removing a traditional source of support for the currency. The rand is likely to remain under pressure amid concerns that elevated oil prices could push inflation higher in energy-importing South Africa.

South African Rand at 4-Month Lows

The Canadian Dollar touched 1.38 against the USD, the lowest since January 2026. Over the past 4 weeks, US Dollar Canadian Dollar gained 0.38%, and in the last 12 months, it decreased 3.95%.

Canadian Dollar Hits 8-week Low

AUDUSD decreased to 0.69, the lowest since February 2026. Over the past 4 weeks, Australian Dollar US Dollar lost 1.59%, and in the last 12 months, it increased 10.49%.

Australian Dollar Hits 6-week Low

The British pound weakened further to $1.33 as investors piled into the US dollar, bracing for a potential escalation in the Middle East conflict. With a 48-hour US deadline for Iran to reopen the Strait of Hormuz expiring today, President Trump has threatened strikes on Iranian power plants if Tehran refuses. Iran’s vow to retaliate against Gulf energy and desalination infrastructure pushed Brent crude above $110 per barrel, deepening concerns over the UK’s exposure to imported energy disruptions. Markets now anticipate four BoE rate hikes in 2026, a dramatic shift from pre-war expectations of two cuts, as policymakers prioritize inflation control. Focus this week turns to February CPI, retail sales, March PMI, and consumer confidence data, which could further shape the central bank’s response to the deepening crisis.

Sterling Slumps to $1.33 as Hormuz Deadline Looms

The euro extended its decline toward $1.15 as investors sought safety in the US dollar amid escalating Iran conflict risks. A 48-hour US deadline for Iran to reopen the Strait of Hormuz expires today, with President Trump threatening strikes on Iranian power plants if Tehran fails to comply. Iran has vowed retaliatory attacks on Gulf energy and desalination facilities, raising fears of a broader regional escalation. Against this backdrop, traders intensified bets on ECB tightening, now pricing in at least three rate hikes in 2026. The central bank held rates steady last week but raised inflation forecasts and cut growth projections, citing mounting risks from the Middle East crisis. Joachim Nagel hinted at a potential April rate hike if inflation pressures worsen, while Francois Villeroy de Galhau reaffirmed the ECB’s commitment to act decisively.

Euro Slides Further as US-Iran Tensions Escalate

The Thai baht fell to around 33 per dollar, reaching the lowest level in ten months as escalating geopolitical tensions in the Middle East weighed on market sentiment. The currency remains under pressure as the war between the US, Israel, and Iran enters its fourth week, with escalating tensions following strikes on Iranian infrastructure and a strong response from Tehran. President Donald Trump has issued a 48-hour ultimatum to reopen the waterway, warning of strikes if it is not met, while Iran has threatened to close the strait and escalate retaliation if attacks continue. Brent crude has surged more than 50% since the start of the conflict, increasing import costs and worsening Thailand’s terms of trade, which has placed downward pressure on the baht. The currency has fluctuated by about 9% year-to-date, reflecting heightened sensitivity to global risk sentiment and energy shocks.

Thai Baht Slips to 10-Month Low

The New Zealand dollar weakened to around $0.581, approaching a two-month low touched in early March, as markets weighed a cautious economic outlook against persistent inflation concerns. Fitch Ratings downgraded New Zealand’s credit outlook, lowering its AA+ rating to negative due to growing challenges in reducing debt after years of delayed fiscal consolidation. This added to worries following weaker-than-expected GDP figures last week, underscoring a still-fragile recovery that faces further risks amid the ongoing conflict in the Middle East. These concerns offset rising expectations for a hawkish Reserve Bank policy stance. Market pricing has shifted sharply, now reflecting nearly 90 basis points of tightening this year. Just last month, the central bank indicated that even a single rate hike was not fully priced in. Investors are now awaiting Governor Anna Breman’s speech on Tuesday for cues on the economy and rate path.

Kiwi Dollar Falls Toward January Low

The Philippine peso weakened to around 60.2 per dollar, marking a new record low, as escalating Middle East tensions and rising oil prices pressured the currency. Threats of strikes on energy infrastructure in the Gulf and broader geopolitical risk fueled safe-haven demand for the US dollar, while foreign selling of local assets added to the decline. The peso has dropped 4.2% this month, ranking among Asia’s worst-performing currencies. The country’s heavy reliance on energy imports and a persistent trade deficit amplify vulnerability, while broader risk-off sentiment across Asian markets adds to pressure. Meanwhile, the BSP has limited interventions to temper volatility rather than defend a specific level, and prolonged oil above $100/barrel could force a policy pivot. Fiscal strains are rising, with higher borrowing costs highlighting the need for reforms and measures to support energy security and domestic demand.

Philippine Peso Falls to New Record Low

The offshore yuan weakened to around 6.915 on Monday, hitting its lowest level in more than two weeks as escalating Middle East tensions boosted the greenback and weighed on broader risk sentiment. The safe-haven dollar remained strong as the standoff between US President Donald Trump and Iran over the Strait of Hormuz intensified, pushing oil prices higher and further fueled global inflation worries. These in turn raised expectations for tighter monetary policy from major central banks. Last week, the People's Bank of China kept key rates unchanged, reflecting a cautious stance that offered limited near-term support to the currency. Meanwhile, sentiment found some support after officials at the China Development Forum struck a reassuring tone, emphasizing policy stability, further market opening, and support for domestic demand. Authorities also downplayed recent yuan weakness, framing market volatility as largely driven by external shocks rather than underlying economic conditions.

Offshore Yuan Hits Two-Week Low

The Australian dollar fell to around $0.69 on Monday, extending last week’s losses and hitting its lowest level in over a week, as a stronger greenback and declining Asian stocks weighed on the risk-sensitive currency. The greenback drew broad support from safe-haven demand amid escalating tensions in the Middle East. US President Trump threatened strikes on Iranian power plants if the Strait of Hormuz remains closed, while Tehran warned it would target key US and Israeli assets. Adding to the Australian dollar’s pressure were falling Asian stocks, reflecting growing concerns about the broader economic fallout from the Middle East conflict and dampening appetite for the commodity-linked Aussie. Domestically, investors now await Wednesday’s inflation data following the RBA’s narrowly approved rate hike to 4.1%. It marked the first back-to-back interest rate increase since mid-2023 and reversed two of last year’s three cuts as the RBA seeks to rein in persistent inflation.

Aussie Dollar Extends Fall to 1-Week Low

The Indian rupee weakened past 93 per dollar, extending its decline after hitting record lows, as surging oil prices and heightened geopolitical tensions in the Middle East continued to weigh on sentiment. The standoff between President Donald Trump and Iran over control of the Strait of Hormuz has intensified, with the US issuing a 48-hour deadline to reopen the waterway, while Iran has warned it could shut the passage entirely if its infrastructure is targeted. The currency has fallen 3% since the conflict began and remains under pressure as the crisis enters its fourth week. Although traders anticipate the possibility of central bank intervention to curb speculative positioning after the sharp decline, sentiment remains fragile. Market participants are now awaiting preliminary purchasing managers’ index data for further insight into economic activity amid ongoing uncertainty.

Indian Rupee Extends Decline

The South Korean won fell past 1,500 per dollar, marking its weakest level since March 2009, as escalating US–Iran tensions rattled markets. The US set a 48-hour deadline for Tehran to reopen the Strait of Hormuz, warning that failure could trigger strikes on Iranian energy facilities, while Iran threatened regional energy and water infrastructure and said it could close the strait if attacked. Risk-off sentiment was compounded by foreign selling of local assets, with net outflows totaling 1.8 trillion won, keeping downward pressure on the currency. South Korea’s heavy reliance on energy imports amplifies the impact of oil price spikes, while broader Asian market weakness, including sharp losses in the KOSPI, further boosted safe-haven demand for the US dollar. The government and ruling party are preparing a 25 trillion-won supplementary budget to cushion the economy from rising energy costs and support vulnerable groups.

South Korean Won Hits Weakest Level Since 2009

The Japanese yen weakened toward 159.5 per dollar on Monday, nearing the key 160 level that has previously triggered market intervention. Top currency chief Atsushi Mimura said the government is prepared to take all necessary steps to respond to foreign exchange moves. Mimura also highlighted the impact of the prolonged Middle East conflict and rising oil prices on the yen, noting that currency fluctuations affect people’s daily lives. The yen failed to hold gains from last week, when the Bank of Japan kept its policy rate steady but signaled a bias toward tighter monetary policy to counter inflationary pressures from surging oil prices. Board member Hajime Takata dissented, recommending a 25 basis point hike to 1% for a second consecutive meeting. BOJ Governor Kazuo Ueda added that a rate increase remains possible if the economic slowdown from the Iran conflict proves temporary.

Yen Remains on Intervention Watch

The dollar index traded above 99.5 on Monday, holding gains from the previous session as rising tensions in the Middle East boosted safe-haven demand for the currency. The US-Israel war with Iran entered its fourth week with no sign of easing, with President Donald Trump threatening strikes on Iranian power plants if the Strait of Hormuz is not reopened, while Tehran warned it would target key US and Israeli assets across the region if its energy facilities were hit. Elevated oil prices continued to fuel inflation fears and lowered the likelihood of a near-term Federal Reserve rate cut, with some traders now pricing in a potential rate hike toward year-end. Last week, the Fed kept its policy rate unchanged as expected, with Chair Jerome Powell noting it was too soon to assess the full economic impact of the Iran conflict. The ECB, BOE and BOJ also held rates steady but signaled readiness to tighten policy further if inflationary pressures persist.

Dollar Holds Firm on Haven Demand

The Brazilian real weakened toward 5.3 per US dollar as investors reacted to escalating Middle East tensions and record interventions by the National Treasury. The Brazilian currency faced renewed pressure as the Treasury conducted buybacks totaling 49.1 billion reais to stabilize local rates amid a shrinking liquidity cushion. This domestic volatility is compounded by a hawkish Federal Reserve and a surge in Brent crude to mid-2022 highs following reports that the US is considering a takeover of Kharg Island to reopen the Strait of Hormuz. Despite the Central Bank of Brazil starting a cautious easing cycle by reducing the Selic rate to a less-than-expected 14.75% in March meeting, the real's momentum is limited by a rebound in the US dollar. Traders remain focused on the Treasury's ability to manage debt maturities through 2027 as the cash buffer dropped to 6.77 months of coverage in January.

Brazilian Real Tumbles Amid Record Intervention

The South Africa rand traded to around 16.9 per USD, hovering near the lowest since early December, reflecting the impact of lingering geopolitical tensions in the Middle East. Emerging market currencies like the rand are typically more sensitive to global uncertainty, and during times of heightened risk, investors tend to shift away from these assets toward safer havens. The rand’s exposure is compounded by South Africa’s reliance on imported oil, meaning that rising global energy prices directly increase domestic costs. The country also lacks a significant strategic oil reserve and does not have the fiscal resources to provide subsidies or reverse tax increases, leaving the currency highly vulnerable if energy prices remain elevated.

South African Rand at Over 3-Month Low

The dollar index edged up to 99.3 on Friday, after falling 0.8% in the previous session, as the war with Iran continued and prospects for a swift resolution remained slim. Oil prices were volatile but held near 2022 highs, heightening concerns about their impact on inflation at a time when central banks are already adopting a more cautious, hawkish stance. The Federal Reserve left the federal funds rate unchanged on Wednesday. Updated projections still point to one rate cut this year, but policymakers highlighted uncertainty surrounding the economic impact of the conflict and flagged elevated upside risks to inflation. The greenback strengthened broadly, with the most notable gains against the Japanese yen. Despite Friday’s uptick, the dollar is down nearly 1% for the week.

Dollar Edges Up on Friday but Set for Weekly Drop

The euro retreated to $1.156 by the close of a volatile week, as investors flocked to the US dollar amid deepening inflation fears tied to the Iran conflict’s energy shock. Brent crude surged back to multi-year highs following attacks on Middle East refineries, while reports suggested the Trump administration may target Iran’s Kharg Island. Against this backdrop, traders ramped up bets on ECB tightening, with money markets now pricing in at least two rate hikes in 2026 and a potential third. The central bank held rates steady on Thursday but raised its inflation outlook while cutting growth forecasts, citing escalating risks from the Middle East crisis. ECB policymaker Joachim Nagel signaled a possible rate rise as soon as next month if price pressures persist, while Francois Villeroy de Galhau underscored the bank’s readiness to take decisive action.

Euro Slumps on Energy Shock Concerns

The British pound fell back below $1.34 by the end of a turbulent week, as investors sought safety in the US dollar amid escalating concerns over inflation fueled by the Iran conflict’s energy price surge. Brent crude and European gas prices hit multi-year highs, amplifying pressure on the UK economy and reinforcing expectations of three Bank of England rate hikes in 2026. The BoE unanimously held rates at 3.75% on Thursday while cautioning that the Middle East crisis could push global energy and commodity costs even higher. Policymakers now project a near-term CPI inflation rebound, reversing recent progress in cooling domestic price and wage growth. Adding to economic strains, UK public sector borrowing jumped to £14.3 billion in February 2026, up from £12.1 billion a year ago and exceeding consensus estimates of £8.5 billion. The figure represents the second-highest February borrowing since records began, surpassed only by 2021.

Sterling Slides on Energy Shock Fears

USDINR increased to an all-time high of 93.59. Over the past 4 weeks, US Dollar Indian Rupee gained 2.75%, and in the last 12 months, it increased 8.75%.

Indian Rupee Hits All-time Low

The euro bounced back to $1.16 at the end of a volatile week, recovering from an over seven-month low, after the European Central Bank signaled a more aggressive stance on inflation, fueled by surging oil and gas prices tied to the Iran conflict. On Thursday, the ECB held interest rates steady but revised its inflation forecast upward while lowering growth projections for the coming years, citing heightened uncertainty from the Middle East conflict. The central bank’s stance has led major financial institutions to anticipate an interest rate hike as early as April, with markets now fully pricing in a rise by June and assigning a 60% probability to a move in May. ECB policymaker Joachim Nagel emphasized the possibility of a rate increase next month if price pressures continue to build, while Francois Villeroy de Galhau reaffirmed the bank’s commitment to act decisively.

Euro Rebounds Amid ECB Rate Hike Speculation

The New Zealand dollar rose to around $0.588, extending gains from the previous session as mounting inflation concerns outweighed disappointing economic growth. Latest GDP figures came in weaker than expected, underscoring a still-fragile recovery, with economists warning that the outlook faces fresh risks amid the ongoing conflict in the Middle East. Despite this, policy expectations have shifted in a more hawkish direction. Markets are now pricing in a 50% probability that the RBNZ could begin raising its cash rate as early as May, with moves more fully anticipated by September and December. This shift reflects worries that the recent surge in energy prices will push inflation well above the RBNZ’s 1-3% target range for much of the year. So far this week, the kiwi has gained nearly 2%, on track to snap a two-week losing streak.

New Zealand Dollar Extends Gains

The offshore yuan weakened to 6.89 per dollar on Friday, reversing the previous session’s gains as a stronger greenback weighed on the currency. The US dollar advanced after major central banks warned that the ongoing Middle East conflict could stoke inflation, prompting traders to scale back expectations for a Federal Reserve rate cut this year. In China, the central bank kept key lending rates unchanged for a tenth straight month in March 2026, with the one-year loan prime rate at 3% and the five-year at 3.5%. The cautious stance reflects mounting uncertainties, including surging oil prices driven by Middle East tensions, while China’s lower 2026 growth target of 4.5%–5% has reduced the urgency for monetary easing. Analysts said that higher oil prices could help China exit prolonged deflation, but they emphasized that, with weak demand or reduced industrial overcapacity, manufacturers may still face rising input costs. Despite Friday’s decline, the yuan is still set for weekly gains.

Offshore Yuan Falls, Still Set for Weekly Gains

The Australian dollar held its recent gains around $0.708 and is set for its biggest weekly advance since mid-January as surging oil prices amid the expanding Middle East war fueled inflation concerns and raised the risk of further RBA tightening. The Reserve Bank on Thursday already warned that the conflict was a material risk to the domestic economy. Governor Michele Bullock also repeatedly warned about persistent inflation risks, adding that the board remains uncertain whether policy is sufficiently restrictive. A relatively strong jobs report further reinforced the central bank’s view that the economy can withstand tighter policy. This follows back-to-back interest rate hikes by the RBA earlier this week. Markets are still divided on a potential move as soon as May, while an August hike is fully priced in. Meanwhile, following strikes by Tehran across the Gulf, investors weighed signals from the US and Israel indicating restraint in further attacks on Iranian energy infrastructure.

Aussie Heads for Sharp Weekly Gain

The Japanese yen strengthened to around 158 per dollar on Friday after nearly hitting the 160 level earlier this week, supported by the Bank of Japan’s bias for tighter monetary policy to counter inflationary pressures from surging oil prices linked to the Middle East conflict. On Thursday, the BOJ held its policy rate at 0.75% as expected, though board member Hajime Takata dissented, recommending a 25 basis point hike to 1% for a second consecutive meeting amid rising inflation risks. BOJ Governor Kazuo Ueda also indicated that a rate increase remains possible if the economic slowdown from the Iran conflict proves temporary and core inflation persists. The yen further benefited from easing oil prices after US President Donald Trump ruled out deploying ground troops to the Middle East, and Israeli Prime Minister Benjamin Netanyahu pledged to refrain from additional strikes on Iranian energy infrastructure.

Yen Rebounds on Hawkish BOJ Bets

The dollar index hovered near 99 on Friday after losing more than 1% in the previous session, as hawkish signals from other major central banks strengthened their currencies at the dollar’s expense. The European Central Bank, Bank of Japan, and Bank of England all kept policy rates unchanged on Thursday but indicated a bias toward tighter monetary policy amid inflation pressures from rising oil prices. The BOJ is expected to resume policy normalization soon, while markets now anticipate rate hikes from both the ECB and BOE this year. Elsewhere, the Reserve Bank of Australia raised its cash rate for the second consecutive meeting on Tuesday, and the Reserve Bank of New Zealand may tighten policy sooner than previously expected. The Federal Reserve also held rates steady on Wednesday, with Chair Jerome Powell stressing that officials need to see progress in reducing inflation before resuming rate cuts. The dollar index is on track to lose about 1.2% this week.

Dollar Weakens on CenBank Decisions

The Brazilian real steadied around 5.27 per US dollar as initial volatility following the Copom decision began to stabilize. While the real jumped to 5.29 earlier after the Central Bank of Brazil reduced the Selic rate by 25 basis points to 14.75%, the currency found support as investors processed the committee's commitment to a cautious easing cycle. The real's resilience is being tested by a 7% surge in Brent crude toward $115 following Iranian strikes on Gulf energy infrastructure. Despite this spike in imported energy costs, the domestic market was buoyed by a 0.15% rise in the March IGP-M preliminary reading, signaling firmer wholesale prices. Traders remain focused on the divergence between Brazil's new rate path and the Fed's restrictive stance, though the real is currently benefiting from a retreat in the dollar's global momentum as the market balances geopolitical risk with the Copom's ongoing hawkishness.

Brazilian Real Steady After Copom

The euro climbed to $1.148 after the European Central Bank left interest rates unchanged for a sixth straight meeting, keeping the deposit rate at 2% as expected. Policymakers signaled a cautious approach, saying decisions will continue to be taken meeting by meeting. The ECB warned that the war in Iran has increased uncertainty, posing upside risks to inflation and downside risks to economic growth, particularly through higher energy prices in the near term. It reiterated its commitment to bringing inflation back to the 2% target over time. Markets still expect further tightening, with two rate hikes fully priced in this year and a possible third. Other major central banks are also holding steady, with the Bank of England and Bank of Japan keeping rates unchanged after the Federal Reserve paused earlier in the week.

Euro Edges Up after ECB Meeting

The British pound rose above $1.33 after the Bank of England unanimously held rates at 3.75%, adopting a more hawkish tone than anticipated. Markets had expected a 7-2 vote for steady rates, but policymakers warned that the Middle East conflict’s impact on soaring energy and commodity prices could push near-term inflation higher, reversing recent disinflation in domestic prices and wages. Traders now fully price in two BoE rate hikes this year, as European gas prices surged following attacks on Qatar’s LNG facilities and Brent crude hit $117/barrel, amplifying UK inflation risks. On the economic front, the latest UK jobs report showed slowing wage growth and unemployment holding at 5.2%, both missing forecasts.

Sterling Tops $1.33 as BoE’s Hawkish Hold Reshapes Rate Outlook

The Swiss franc traded around 0.79 per USD, nearing the highest since 2011, supported by safe-haven demand amid geopolitical tensions and a steady policy stance. The Swiss National Bank left its benchmark at 0% for the third consecutive meeting, as widely anticipated, with policymakers reiterating the central bank's readiness to intervene in foreign exchange market to safeguard price stability. Annual inflation held at 0.1% for the third month in February, at the bottom of the SNB's 0%-2% target. Still, it remains in line with the SNB’s forecasts and the economy showed signs of mild recovery in Q4. The SNB predicted that the current increase in energy prices will push inflation up more rapidly in the coming quarters, averaging 0.5% in 2026 and 2027, and 0.6% in 2028.

Swiss Franc Stays Firm

The euro traded near $1.145, flirting with its weakest level since July, as investors sought the dollar’s safety amid escalating Middle East tensions and assessed the impact of soaring energy prices on the European Central Bank’s policy path. A 25% surge in European gas prices, following attacks on Qatar’s LNG facilities, and Brent crude at $114/barrel have heightened inflation risks for the Eurozone, prompting markets to increase bets on ECB rate hikes. While the ECB is expected to hold rates steady today, focus will shift to its policy statement and President Christine Lagarde’s press conference for clues on future moves.

Euro Remains Weak Ahead of ECB Decision

The British pound held near $1.327 on Thursday as investors balanced escalating energy costs against weaker-than-expected UK wage growth, just hours before the Bank of England’s interest rate decision. European natural gas prices spiked 25% after attacks on critical LNG facilities in Qatar, while Brent crude surged to $114/barrel, heightening inflation risks for the UK economy. Markets now anticipate a more hawkish stance from the BoE, though the central bank is widely expected to hold rates today. Looking ahead, traders are pricing in about 32 basis points of tightening by year-end, equivalent to more than a quarter-point hike, with more than a 50% chance of a June rate increase and a full hike priced in by September. Meanwhile, the latest UK jobs report revealed slowing wage growth and unemployment steady at 5.2%, both below expectations.

Pound Steady Ahead of BoE Decision

The Indonesian rupiah remained soft, hovering near IDR 17,000 per dollar on Thursday in low-volume holiday trading. Meanwhile, the dollar index held firm after the U.S. Fed indicated rates would stay steady until inflation shows clearer signs of easing. Domestically, Bank Indonesia’s latest policy statement dropped earlier language about creating room to cut borrowing costs, reflecting a more cautious stance. Rising energy prices have heightened concerns of an inflation shock, particularly for Indonesia, which relies heavily on imported Middle Eastern oil and has limited buffers against supply disruptions. Inflation accelerated to 4.76% in February, a near three-year high and above the central bank’s 1-1/2%–3-1/2% target range. The rupiah has fallen about 1.8% so far this year, despite BI holding rates steady since last October. Policymakers have also announced new measures to curb speculative activity in the currency, set to take effect in April.

Rupiah Stays Weak Amid Holiday-Thinned Trade, Fed Signal Weighs

The New Zealand dollar rose to around $0.582 on Thursday after briefly dipping to $0.578, as investors weighed weak economic growth against rising inflation risks. Data out today showed the economy expanded by just 0.2% in the December quarter, undershooting both analysts’ expectations and the Reserve Bank of New Zealand’s forecasts of 0.4% and 0.5%, respectively. Annual GDP rose 1.3%, missing the 1.7% estimate but coming in above the revised 1.1% growth in the previous quarter. Overall, the data points to a still-fragile recovery, with the Middle East war adding further uncertainty over the 2026 outlook. Last month, the central bank left its cash rate unchanged, with Governor Anna Breman indicating that a hike might only be considered in December as inflation was easing. However, the recent surge in energy prices is now expected to push inflation well above the RBNZ’s 1-3% target range for much of the year, prompting traders to price in rate increases in both September and December.

New Zealand Dollar Reverses Early Losses

The South Korean won strengthened to around 1,498 per dollar, extending gains for another session on cautious optimism following verbal interventions from authorities aimed at curbing excessive volatility. Government officials, led by Finance Minister Koo Yun-cheol, stated that policymakers stand prepared to deploy all available tools, with round-the-clock monitoring of foreign exchange markets and a commitment to intervene if needed. Sentiment was further underpinned by plans from authorities and the Bank of Korea to conduct financial sector stress tests and prepare to expand a 100 trillion won stabilization program. However, gains were partially capped as the dollar firmed following the Federal Reserve’s decision to keep interest rates unchanged at 3.5–3.75 percent for a second consecutive meeting, while maintaining its projection of just one rate cut this year.

Korean Won Rises on Intervention Signals

The offshore yuan edged higher to around 6.89 per dollar on Thursday, trimming losses from the previous session as fading expectations of an imminent rate cut by the People’s Bank of China lent support to the currency. Beijing's rate markets signaled a reduced likelihood of further monetary easing, as recent data suggest a stronger-than-expected start to 2026, alongside a modest rebound in consumer prices and easing factory-gate deflation. At the same time, a sharp surge in global oil prices, driven by escalating conflict in the Middle East, is potentially limiting the scope for aggressive monetary loosening. Investors are adjusting their outlook, with markets now leaning toward a steady or slightly firmer policy stance from the central bank. Attention is now turning to Friday’s announcement of China’s benchmark loan prime rates, where the one-year and five-year tenors are widely expected to remain unchanged at 3.0% and 3.5%, respectively.

Offshore Yuan Edges Higher

The Indian rupee weakened to around 93 per dollar, marking its lowest level on record, pressured by surging oil prices and heightened geopolitical tensions in the Middle East. Brent crude and India’s crude basket climbed above $105–$111 per barrel following attacks on key energy infrastructure and threats to supply routes through the Strait of Hormuz. Higher oil import costs fueled concerns over inflation and a widening current account deficit, with India importing over 80% of its energy needs. Importers stepped up dollar purchases, while foreign investors have pulled nearly $8 billion from Indian equities so far in March, intensifying capital outflows. Meanwhile, the Reserve Bank of India has intervened to support the currency but allowed the 92.50 level to be breached, signaling cautious management amid thin liquidity and persistent external risks.

Indian Rupee Slips to Record Low

The Philippine peso depreciated past the key 60-per-dollar mark, hitting a fresh record low as surging oil prices, driven by escalating tensions in the Middle East, weigh on the country’s economic outlook. The currency dropped as much as 1.5%, reflecting the heightened risks posed to the Philippines, which relies on imports for more than 90% of its crude oil. Earlier this week, the Bangko Sentral ng Pilipinas (BSP) said it had stepped in as the peso approached this level, but noted that its interventions aim to moderate sharp swings that could affect inflation rather than defend a specific exchange rate. The peso has now weakened more than 4% this month, making it one of the worst-performing currencies in Asia. Economists say the Philippines is particularly vulnerable to inflation and growth pressures amid high energy costs.

Philippine Peso Hits Record Low Above 60

The Australian dollar edged up to around $0.704 on Thursday, after losing more than 1% in the previous session, as investors assessed the latest jobs report. Data showed employment surged by 48,900 in February, well above the forecasted 20,000 gain, underscoring continued labor market resilience. However, the unemployment rate unexpectedly climbed to 4.3%, pointing to a more mixed picture. Still, the rate remains historically low and reinforced the Reserve Bank’s view that the economy can withstand tighter policy. Although they did little to shift rate expectations, with markets still divided on whether another hike could come as soon as May. Meanwhile, the central bank warned that the escalating Middle East war poses material risk to domestic economy and signaled a more severe global shock, with persistently high inflation likely to add pressure on some households and borrowers. But they emphasized that Australia’s financial system remains broadly resilient.

Aussie Edges Higher on Strong Jobs Data

The dollar index held above 100 on Thursday after rebounding sharply in the previous session, supported by an increasingly hawkish Federal Reserve outlook. The central bank left the fed funds rate unchanged, as expected, noting the uncertain economic impact of the Iran war while flagging elevated upside risks to inflation. The Fed indicated it will not cut rates until inflation shows signs of easing, though it still projects one rate reduction this year and another in 2027, consistent with its December outlook. Data on Wednesday showed US producer prices rose more than expected in February. Investors now await the latest weekly jobless claims for fresh insights on the labor market. Meanwhile, oil prices climbed further following attacks on energy infrastructure across the Middle East as the Iran conflict continues. President Donald Trump temporarily waived the Jones Act to reduce the cost of transporting oil, gas, and other commodities within the US.

Dollar Firms Up on Hawkish Fed Outlook

The Japanese yen weakened toward 160 per dollar on Thursday, hovering at its lowest level since July 2024 when authorities last stepped in to support the currency, as investors awaited the Bank of Japan’s policy decision. The central bank is widely expected to keep its policy rate unchanged but could signal a hawkish bias amid a weak yen and elevated oil prices, which are boosting inflation risks. Oil prices surged again following fresh attacks on energy infrastructure in the Middle East as the Iran war continues. The yen also faced pressure from a strong dollar after the US Federal Reserve signaled it will hold rates until inflation shows signs of easing again. Meanwhile, Prime Minister Sanae Takaichi is set to meet US President Donald Trump later today to discuss potential economic and military cooperation, navigating a delicate diplomatic balancing act after Trump initially urged Japan to deploy warships to the Strait of Hormuz before retracting the request.

Yen Pressured Ahead of BOJ Decision

USDINR increased to an all-time high of 93.13. Over the past 4 weeks, US Dollar Indian Rupee gained 2.25%, and in the last 12 months, it increased 7.85%.

The South Korean Won touched 1509.00 against the USD, the lowest since March 2009. Over the past 4 weeks, US Dollar South Korean Won gained 4.01%, and in the last 12 months, it increased 3.38%.

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