Dollar Supported by Geopolitical Tensions as Energy Prices Rise.

USD – Remains supported by safe-haven demand amid geopolitical uncertainty, though the sustainability of the move will depend on incoming U.S. data and how the Middle East situation evolves.

EUR – Facing renewed pressure as higher energy prices weigh on the eurozone outlook, leaving the single currency sensitive to both energy markets and upcoming U.S. data.

GBP – Trading in a choppy but relatively stable range, supported by a more hawkish repricing of Bank of England expectations compared with the ECB.

---

USD:

The dollar is gaining again this morning as markets adjust to the possibility of a prolonged conflict in the Middle East, with neither side currently showing much willingness to pursue a diplomatic resolution. Elevated energy prices are weighing on European equities, while U.S. markets managed to post solid gains yesterday. With the potential duration of energy supply disruptions still highly uncertain, it remains unclear whether the dollar can continue to extend its gains or whether markets will eventually stabilise and move back toward pre-conflict levels.

On the data front, attention today turns to the weekly U.S. jobless claims figure, expected at around 215K, ahead of tomorrow’s key non-farm payrolls report for February, which could provide further direction for the dollar.

---

EUR:

The euro has turned lower this morning after posting modest gains yesterday, as energy prices continue to edge higher. The eurozone remains particularly sensitive to energy costs, meaning renewed upward pressure in oil and gas markets is weighing on the single currency.

Today’s eurozone calendar includes retail sales data and a speech from ECB President Christine Lagarde. However, EURUSD is likely to be driven primarily by developments in the U.S. data cycle and any further escalation or disruption around the Strait of Hormuz.

---

GBP:

Sterling has been trading in a relatively choppy range against the dollar over the past couple of sessions, while holding firmer levels against the euro, with GBPEUR still roughly 1% higher than late last week. This strength is partly driven by a more hawkish repricing of Bank of England expectations relative to the European Central Bank.

Markets are now pushing back expectations for the next BoE rate cut, which is not fully priced until the November meeting. The probability of a rate cut as early as March has dropped significantly compared with just a few weeks ago. With no major UK data releases scheduled today, attention is likely to remain focused on geopolitical developments in the Middle East and broader market sentiment.

Economic Calendar