Forex News
Nordea analysts Tuuli Koivu and Anders Svendsen say Euro area headline and core inflation stayed close to the ECB target in February, leaving the broader outlook largely unchanged. However, they stress that higher Oil and gas prices linked to conflict in the Middle East could significantly lift Euro-area inflation and trigger ECB repricing if the shock proves persistent.
Energy shock risk to ECB inflation path
"The flash estimates for Euro-area inflation in February did not alter the overall view of price pressures in the economic zone. Headline inflation at 1.9% and core inflation at 2.4% were close to the levels seen in previous months as well as the ECB’s target even if above expectations. However, if the conflict in the Middle East continues and price pressures begin to accumulate not only in the energy sector but more broadly across global supply chains, the inflation outlook may become much more interesting from the central bank’s perspective."
"It is way too early to know how the war in the Middle East will evolve and to what extent and for how long it will add upward pressure to the global energy prices. If the shock is short-lived and supply chains recover in a couple of weeks’ time, we tend to think that the impact on the Euro-area inflation remains limited and there is no reason for the ECB to start rethinking its monetary policy stance."
"However, given that the war has already escalated and US President Trump expects it to continue for at least a month, the price fluctuations may turn out to be more permanent than in a number of previous episodes. In that case, the impact on Euro-area headline inflation could of course be significant at least in a short term. But even in that case, it is far from certain how the ECB sees the price pressures to run through the economy and whether the price pressures stemming from energy are strong enough to cause another inflation cycle as it did in 2022. It is also good to keep in mind that in EURs, energy prices are not that much higher than a year ago so that the impact on the annual inflation numbers is still moderate."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- WTI jumps more than 6%, breaking above the $75 mark.
- Oil prices surge as the US-Iran war raises fears of supply disruptions.
- Goldman Sachs estimates an $18 per barrel geopolitical risk premium in Oil.
West Texas Intermediate (WTI) surges more than 6% on Tuesday, climbing above the $75 psychological mark as the ongoing US-Iran war raises fears of potential oil supply disruptions through the Strait of Hormuz.
At the time of writing, the US Crude Oil benchmark is trading around $76.16, its highest level since June 2025.
The Strait of Hormuz handles around 20% of global oil shipments, making it one of the world’s most important energy chokepoints. Senior officials from Iran’s Islamic Revolutionary Guard Corps (IRGC) reportedly declared the strait closed, warning that any vessel attempting to pass through could be “set ablaze."
Shipowners have largely halted transit through the chokepoint amid rising security concerns, with several vessels anchored outside the Strait. Meanwhile, Saudi Aramco has suspended operations at its Ras Tanura refinery following a drone strike in the area. The facility can process about 550,000 barrels of crude per day.
Reuters reported on Monday that Goldman Sachs estimates an $18 per barrel real-time geopolitical risk premium in Oil prices, according to a note published on Sunday. The bank said the premium could moderate to around $4 per barrel if only 50% of flows through the Strait of Hormuz are disrupted for a month.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
European Central Bank (ECB) governing council member and Governor of the Bank of Greece, Yannis Stournaras said in an interview with Reuters during the day that the central bank needs to be flexible about its monetary policy amid the war between the United States (US), Israel, and Iran.
Remarks
ECB should be flexible given Iran.
Upward pressure on inflation if Iran war continues.
No rush to change policy, but ECB is on alert.
Market reaction
No immediate impact occurs on the Euro (EUR) from ECB Stournaras' comments. EUR/USD is down 0.7% to near 1.1600, as of writing, amid the Middle East war.
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
- European Natural Gas futures surge after Qatar announces a full suspension of Liquefied Natural Gas production.
- Disruptions around the Strait of Hormuz and low European storage levels intensify supply concerns.
- Analysts warn of a major supply shock that could embed a lasting geopolitical premium into Gas markets.
Dutch TTF Natural Gas Futures for the April 2026 contract, the benchmark for European Natural Gas prices, are rallying sharply, trading around €59.62, up 33.97% on Tuesday at the time of writing, extending the price surge to more than 85% since Friday's close. The gains were triggered by QatarEnergy’s decision to suspend all Liquefied Natural Gas (LNG) production following attacks on its industrial facilities.
Qatar accounts for roughly 20% of global LNG export capacity according to Oilprice, and the simultaneous shutdown of the Ras Laffan and Mesaieed sites represents one of the largest supply shocks seen in the Gas market since Russia’s invasion of Ukraine in 2022. QatarEnergy’s declaration of force majeure adds to uncertainty for buyers tied to long-term contracts, who may now be forced to turn to the spot market.
Tensions extend beyond Qatari facilities. Shipping traffic through the Strait of Hormuz, a key route for Gulf Gas and Oil exports, is severely disrupted following the strikes and Iranian threats. Even without prolonged structural damage, a slowdown in flows is enough to intensify competition between Europe and Asia for alternative cargoes from the United States (US) and Australia.
In Europe, the situation is particularly sensitive as storage levels remain below those recorded at the same time last year, leaving the region more exposed to a prolonged disruption. According to Bloomberg, Goldman Sachs estimates that a one-month interruption of flows through Hormuz could lead to a doubling of European Gas prices compared to levels seen before the escalation, underscoring the scale of systemic risk.
“A hypothetical longer disruption of Natural Gas supply transit through the Strait of Hormuz lasting more than two months would likely lift European natural gas prices above €100/MWh ($35/mmBtu) to trigger more significant global Gas demand destruction”, added Goldman Sachs analysts.
In the United States, Henry Hub futures are rising more moderately, as the domestic market is structurally less exposed to imports. The US Natural Gas (XNG/USD) trades around $3.15 at the time of press, 5.40% higher on the day. However, higher prices in Europe and Asia reinforce the export premium and limit flexibility for international buyers, especially as US liquefaction facilities are already operating at elevated capacity.
Beyond the immediate price reaction, this episode may durably reshape perceptions of geopolitical risk in the Natural Gas market. Europe’s increased reliance on LNG since the reduction of Russian pipeline flows has heightened its exposure to maritime tensions and regional conflicts. Even if Qatari production resumes quickly, fierce competition for available cargoes could keep Dutch TTF Natural Gas Futures elevated in the coming weeks, embedding a more structural risk premium into forward contracts.
Natural Gas FAQs
Supply and demand dynamics are a key factor influencing Natural Gas prices, and are themselves influenced by global economic growth, industrial activity, population growth, production levels, and inventories. The weather impacts Natural Gas prices because more Gas is used during cold winters and hot summers for heating and cooling. Competition from other energy sources impacts prices as consumers may switch to cheaper sources. Geopolitical events are factors as exemplified by the war in Ukraine. Government policies relating to extraction, transportation, and environmental issues also impact prices.
The main economic release influencing Natural Gas prices is the weekly inventory bulletin from the Energy Information Administration (EIA), a US government agency that produces US gas market data. The EIA Gas bulletin usually comes out on Thursday at 14:30 GMT, a day after the EIA publishes its weekly Oil bulletin. Economic data from large consumers of Natural Gas can impact supply and demand, the largest of which include China, Germany and Japan. Natural Gas is primarily priced and traded in US Dollars, thus economic releases impacting the US Dollar are also factors.
The US Dollar is the world’s reserve currency and most commodities, including Natural Gas are priced and traded on international markets in US Dollars. As such, the value of the US Dollar is a factor in the price of Natural Gas, because if the Dollar strengthens it means less Dollars are required to buy the same volume of Gas (the price falls), and vice versa if USD strengthens.
Danske Research Team highlights severe disruption to Oil and gas markets as conflict involving the United States, Israel and Iran escalates. Shipping through the Strait of Hormuz has stalled, stranding significant volumes and driving freight rates sharply higher.
Middle East conflict drives energy repricing
"These price movements reflect growing supply fears following precautionary shutdowns of key oil and gas facilities in the Middle East. Israeli and US strikes on Iran, along with Tehran's retaliatory actions, prompted QatarEnergy to halt LNG production after its facilities were hit by Iranian drones. Saudi Arabia also shut down its Ras Tanura refinery, a major crude export terminal, after a drone strike."
"Shipping through the vital Strait of Hormuz (SOH) has come to a standstill, leaving 77 million barrels of oil stranded on 150 tankers in the Persian Gulf. While an Iranian Revolutionary Guards official declare the SOH closed and threatened to target ships attempting passage, the US military's Central Command insisted the Strait remains open."
"Nevertheless, shipping is expected to remain idle until safe passage can be ensured. The disruptions further strained global supply chains, pushing the benchmark freight rate to a record high, doubling since Friday. Daily LNG tanker freight rates jumped more than 40% on Monday following Qatar's production halt, amplifying concerns over energy shortages."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Annual Harmonized Index of Consumer Prices (HICP) in the Eurozone, as measured by changes in the prices of a representative basket of goods and services in the European Monetary Union, rises at a faster pace of 1.9% in February, against estimates and the previous reading of 1.7%. On month, headline inflation stood at 0.7% after prices declined by 0.6% in January.
Also, the Eurozone's annual core HICP – which excludes volatile components like food, energy, alcohol, and tobacco – grows at a faster pace of 2.4% vs. estimates and the prior release of 2.2%. Month-on-month core HICP rises sharply by 0.8%.
Market reaction
There seems to be a positive impact of the higher-than-expected Eurozone HICP data on the Euro (EUR) against riskier currencies, while it is significantly down against safe-haven peers. As of writing, EUR/USD trades 0.7% lower to near 1.1600.
(This story was corrected on March 3 at 10:40 GMT to say that Eurozone inflation stood at 0.7% MoM in February, not 1.7%.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.69% | 0.72% | 0.20% | 0.15% | 0.63% | 0.90% | 0.83% | |
| EUR | -0.69% | 0.03% | -0.49% | -0.53% | -0.06% | 0.21% | 0.14% | |
| GBP | -0.72% | -0.03% | -0.52% | -0.55% | -0.08% | 0.18% | 0.11% | |
| JPY | -0.20% | 0.49% | 0.52% | -0.02% | 0.45% | 0.70% | 0.64% | |
| CAD | -0.15% | 0.53% | 0.55% | 0.02% | 0.47% | 0.74% | 0.67% | |
| AUD | -0.63% | 0.06% | 0.08% | -0.45% | -0.47% | 0.26% | 0.17% | |
| NZD | -0.90% | -0.21% | -0.18% | -0.70% | -0.74% | -0.26% | -0.07% | |
| CHF | -0.83% | -0.14% | -0.11% | -0.64% | -0.67% | -0.17% | 0.07% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
(This section below was published at 07:29 GMT as a preview of the Eurozone flash HICP data for February)
Eurozone flash HICP Overview
The Eurozone preliminary Harmonized Index of Consumer Prices (HICP) data for February is scheduled to be published today at 10:00 GMT.
According to preliminary estimates, Eurostat will show that both the headline and core HICP – which excludes volatile components like food, energy, alcohol, and tobacco – grew at a steady pace of 1.7% and 2.2% Year-on-Year (YoY), respectively.
The Eurozone headline HICP has cooled down in the last two months from 2.1% YoY in November. Therefore, signs of further slowdown in the HICP growth rate could prompt dovish European Central Bank (ECB) expectations. On the contrary, higher-than-expected figures are unlikely to bring a dramatic change in the ECB's monetary policy expectations.
ECB President Christine Lagarde said in her statement before the Committee on Economic and Monetary Affairs (ECON) of the European Parliament on February 26 that she is confident about inflation stabilizing at the central bank’s 2% target in the medium term and retained a data-dependent approach. Lagarde said, “I am really convinced that we should maintain data dependent approach.”
How could Eurozone inflation data affect EUR/USD?
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EUR/USD trades 0.2% lower at around 1.1667 ahead of the Eurozone inflation data release. The near-term bias is bearish as the pair trades below the 20-day Exponential Moving Average (EMA, which is near 1.1788.
The 14-day Relative Strength Index (RSI) sliding below 40.00 signals the onset of bearish momentum, pointing to room for further downside extension before selling pressure becomes exhausted.
Initial support stands at the rising support trend line around 1.1640 that had guided the advance from 1.1468. The scenario of a trend-line break would expose the price to a deeper pullback toward 1.1600. On the upside, immediate resistance emerges at the February 19 low of 1.1742, followed by the 20-day EMA around 1.1788. A further break above the average would strengthen the odds of further upside toward 1.1820
(The technical analysis of this story was written with the help of an AI tool.)
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
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