USD – Rebounded as geopolitical tensions re-escalate, with renewed uncertainty and stronger oil prices restoring safe-haven demand for the dollar.

EUR – Pressured as energy-driven volatility and a stronger dollar reverse recent gains, with the pair largely driven by external factors rather than domestic data.

GBP – Slightly firmer but still constrained, as central bank caution tempers rate hike expectations and limits upside potential.

USD:

The dollar has swung back into favour after yesterday’s optimism around a potential end to the Iran conflict faded. Trump’s speech overnight failed to reassure markets, instead striking a more aggressive tone with promises to escalate military action in the coming weeks. This shift has reignited uncertainty and supported the dollar.

Oil prices have responded accordingly, with Brent crude rebounding sharply, reinforcing the risk-off tone and underpinning USD strength. The broader narrative remains highly fluid, with markets reacting to frequent shifts in geopolitical messaging.

On the calendar today, focus turns to US jobless claims and speeches from Fed officials Logan and Bowman. Attention will then quickly shift to tomorrow’s key non-farm payrolls report for March, which could provide clearer direction for the dollar.

EUR:

The euro has given back a significant portion of its recent gains, with EURUSD retreating as geopolitical tensions intensify and oil prices rise again. Brent crude is up around 9% this morning, reversing part of the earlier decline and weighing on the pair.

At present, EURUSD is being driven almost entirely by external dynamics—namely US developments and energy markets—rather than eurozone-specific data. These factors are expected to remain the primary drivers through today’s session.

GBP:

Sterling edged slightly higher against the euro but remains broadly constrained as Bank of England rhetoric pushes back against aggressive rate hike expectations. Governor Bailey noted that markets may be “getting ahead of themselves,” signalling a more cautious policy approach.

While this has not fully unwound expectations—two hikes are still priced—it has reduced the likelihood of near-term tightening, particularly in April.

With no major UK data releases today, focus shifts to the Bank of England’s Decision Maker Panel survey, which may offer further insight into business sentiment and inflation expectations.