Dollar Supported by Safe-Haven Flows, Euro Softens, Sterling Range-Bound.

USD – The dollar is supported by safe-haven demand and higher yields as markets monitor geopolitical risks and the outlook for Federal Reserve policy.

EUR – The euro is trading slightly softer, pressured by rising energy prices and broader risk sentiment while lacking strong eurozone data catalysts.

GBP – Sterling remains range-bound, with BoE policy expectations, political uncertainty and global risk trends shaping the pound’s direction.

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USD:

The US dollar is trading with a firmer tone as investors continue to favour defensive assets amid persistent geopolitical tensions and elevated energy prices. Higher oil prices have raised concerns about global inflation pressures, which in turn has supported US Treasury yields and provided some backing for the greenback. Markets remain highly focused on the outlook for Federal Reserve policy, with traders assessing whether stronger inflation dynamics could delay the timing of expected rate cuts. In the near term, USD direction is likely to remain closely linked to yield movements, geopolitical developments and upcoming US macroeconomic data.

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EUR:

The euro is trading slightly softer against the dollar, with the single currency sensitive to the recent rise in energy prices and broader global risk aversion. As a large net energy importer, the eurozone tends to be more vulnerable to oil price spikes, which can weigh on the region’s growth outlook and pressure the euro. With limited major eurozone data releases today, EUR/USD is largely reacting to external drivers such as US rate expectations, global risk sentiment and commodity price movements. The European Central Bank has maintained a cautious stance on policy, leaving the euro without strong domestic catalysts in the near term.

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GBP:

Sterling is trading in a relatively narrow range as markets continue to assess the outlook for the UK economy and Bank of England policy. While the pound has shown some resilience against the euro, it remains under pressure versus the US dollar as safe-haven flows favour the greenback. Rising energy prices also pose a challenge for the UK economy given its exposure to imported energy costs, potentially complicating the Bank of England’s policy outlook. Political developments and fiscal considerations in the UK continue to contribute to cautious sentiment around sterling, leaving the currency sensitive to both domestic headlines and broader global risk trends.

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