Forex News
MUFG’s Senior Currency Analyst Lee Hardman notes that the surge in Oil prices linked to the Middle East conflict is reinforcing US Dollar strength, especially versus high-yielding emerging market currencies. He highlights that weaker US labour data would normally weigh on the Dollar, but the energy shock and hawkish repricing in rates are instead supporting USD within its 96.000–100.00 index range.
Oil-driven risk backdrop underpins Dollar
"The US dollar has continued to strengthen against other major currencies with the dollar index moving towards the top of the 96.000 to 100.00 trading range that has been in place since Q2 of last year."
"US dollar strength has been more evident against the high yielding emerging market currencies of the South African rand and Hungarian forint."
"Normally, the softer NFP report would have reinforced Fed rate cut expectations and weakened the US dollar in the absence the Middle East conflict."
"So far the US rate market has moved to push back both the timing and scale of further Fed rate cuts lifting US rates and the US dollar."
"Financial market conditions are becoming more challenging for carry trades triggering an unwind of popular positions with the FX market likely to become much more volatile the longer the conflict drags on."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Dow Jones falls on concerns that rising energy costs could slow growth and reignite inflation.
- Middle Eastern producers cut output as the Strait of Hormuz remains closed amid the Iran war.
- Rising energy prices lift inflation expectations, fading Fed rate cut bets.
Dow Jones futures fall 1.74% to trade below 46,700 during European hours ahead of the US regular market open on Monday. S&P 500 and Nasdaq 100 futures decline 1.61% and 1.75% to trade below 6,650 and 24,250 at the time of writing.
US stock futures dropped sharply as Oil prices rose above $113.00 per barrel amid the escalating Middle East conflict, raising concerns that higher energy costs could slow growth and reignite inflation. However, West Texas Intermediate (WTI) Oil price pares its daily gains and is trading around $100.00 at the time of writing.
Middle Eastern producers cut output as the Strait of Hormuz remains closed due to the Iran war. Kuwait, a member of the Organization of the Petroleum Exporting Countries (OPEC), announced precautionary production cuts, while Iraq’s southern oil output dropped to 1.3 million barrels per day from 4.3 million. Saad Sherida Al‑Kaabi, Qatar’s energy minister, told the Financial Times on Friday he expects Gulf producers to halt exports within weeks, potentially pushing oil to $150 per barrel.
US President Donald Trump said on Sunday that the rise in oil prices is a “very small price to pay” for defeating Iran and ensuring global peace. Earlier, Trump posted on Truth Social that Iran’s only option is unconditional surrender and that after that happens, he will help select its next leader, as reported by the Telegraph.
Wall Street posted losses last week after weaker-than-expected payrolls data heightened inflation concerns. The Dow Jones ended the week down 3%, while the S&P 500 fell 2% and the Nasdaq 100 declined 1.2%.
Rising energy prices are also reshaping inflation expectations, reinforcing bets that the Federal Reserve (Fed) may delay interest rate cuts. Investors now look to this week’s US CPI and PCE inflation data for direction, along with earnings reports from Oracle, Adobe, and Hewlett-Packard Enterprise.
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- Gold kicks off the new week on a weaker note as inflation concerns continue to boost the USD.
- The risk of a further escalation of Middle East tensions lends some support to the commodity.
- The technical setup favors the XAU/USD bears and backs the case for further near-term losses.
Gold (XAU/USD) maintains its offered tone just below the $5,100 mark through the first half of the European session, though it holds above a four-day low touched earlier this Monday. Investors remain worried about the effects of a protracted Middle East conflict on Crude Oil prices and the global economy, which assists the safe-haven precious metal to attract some intraday buying ahead of the $5,000 psychological mark.
In fact, the joint US-Israeli campaign against Iran enters its tenth day on Monday, with no signs of an end to hostilities. Moreover, Iran named Ayatollah Ali Khamenei's son, Mojtaba Khamenei, as the new Supreme Leader, signaling hardliners remain firmly in charge. This raises the risk of a further escalation of tensions as the move is unlikely to be welcomed by US President Donald Trump, who had declared the son "unacceptable".
Moreover, the closure of the Strait of Hormuz – a vital shipping route for oil and gas – fuels worries about an energy shock, which could disrupt global economic activity. These further temper investors’ appetite for riskier assets, which is evident from a sea of red across the global equity markets, and offered additional support to the Gold.
Meanwhile, an intraday surge of over 25% in Crude Oil prices fueled inflation concerns and further dimmed the prospects for near‑term rate reductions by the US Federal Reserve (Fed), offsetting Friday's dismal US Nonfarm Payrolls (NFP) report. This, in turn, lifts the US Dollar (USD) to a fresh high since November 2025 and keeps a lid on any further recovery for the non-yielding Gold, warranting some caution for bullish traders.
XAU/USD 4-hour chart
Gold weakness below 200-EMA on H4 should pave the way for deeper losses
The near-term bias is neutral with a modest downside tilt, as the Gold price oscillates above the rising 200-period Exponential Moving Average (EMA) on the 4-hour chart, showing that the broader uptrend remains intact but momentum has cooled. The Moving Average Convergence Divergence (MACD) indicator slips marginally below its signal line around the zero mark and the histogram has turned slightly negative, suggesting fading bullish pressure rather than an outright bearish regime. The Relative Strength Index at 43 hovers below the 50 midline, aligning with a consolidative tone after the late pullback from this month’s highs.
Immediate support emerges at the $5,060 region, guarding the more important $5,000 area where the 200-period EMA converges with recent reaction lows, and a break below this zone would open the way toward $4,960. On the upside, initial resistance is located around $5,140, the latest swing high before the current drift lower, followed by $5,180 as the next barrier to restore a more convincing bullish profile. A sustained move above $5,180 would neutralize the current downside bias and expose the $5,230 area, while failure to hold above $5,000 would shift focus toward a deeper corrective phase.
(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.
UOB’s Global Economics & Markets Research notes a major setback in the US jobs market in February, as Non-farm payrolls fell 92,000, the largest drop since October 2025. Unemployment edged up to 4.4% and labour force data were heavily revised, pushing participation down to 62.0%, further below the pre-pandemic high, while wage growth accelerated to 0.4% m/m and 3.8% y/y.
Broad-based losses and softer participation
"After a strong start in Jan, the non-farm payrolls (NFP) for Feb came in at -92,000 (well below the Bloomberg median est 55,000 and no analyst penciled in a negative payroll with the lowest forecast at +10,000), the largest decrease since Oct 2025 (-140,000)."
"The other surprise was the unemployment rate which edged higher to 4.4% in Feb (from 4.3% in Jan, 4.4% in Dec), adding to the pessimism of the Feb job losses."
"As a result, the labor force participation rate edged lower by 0.1ppt to 62.0% in Feb, but it should be noted that the rate in Jan was revised markedly lower to 62.1% (from previous est. 62.5%) due to the sharp revision in Jan labor force numbers. And it is now even further from the pre-pandemic high (63.3%)."
"Job losses were broad-based in Feb, with the private sector bearing the brunt, at -86,000 versus the -6,000 of government positions."
"Wages continued to rise and at a faster pace, by 0.4% m/m, 3.8% y/y in Feb (versus Bloomberg est of 0.3% m/m, 3.7% y/y, and 0.4% m/m, 3.7% y/y in Jan)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- DXY kicks off the new week on a positive note amid a further escalation of Middle East tensions.
- Surging Oil prices fuel inflation concerns, dimming Fed rate cut bets, and underpinning the USD.
- A sustained move and acceptance above the 200-day EMA backs the case for additional gains.
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, opened with a bullish gap and touched a fresh high since November 2025, around the 99.70 area, at the start of a new week. The index sticks to its intraday gains through the first half of the European session and seem poised to appreciate further.
An intraday surge in Crude Oil prices to over a three-year peak fueled inflation concerns and dimmed prospects for near‑term rate reductions by the US Federal Reserve (Fed). Furthermore, the escalating geopolitical tensions in the Middle East benefit the USD's unmatched status as the global reserve currency. This, in turn, validates the near-term positive outlook for the DXY.
From a technical perspective, the near-term bias is mildly bullish as the USD extends above the 200-day Exponential Moving Average (EMA) near 99.00, signaling a recovery of the broader uptrend context. Moreover, the Moving Average Convergence Divergence (MACD) indicator stands in positive territory with the MACD line above its signal line and a modestly positive histogram, pointing to strengthening upside momentum.
Meanwhile, the Relative Strength Index (RSI) at 68 hovers just below overbought territory, suggesting buyers retain control but with scope for momentum to cool if gains stall. Initial support emerges at the 99.00 area, where the 200-day EMA converges with recent breakout levels, and a break below there would expose secondary support around 98.80.
On the upside, immediate resistance aligns at 99.80, ahead of the 100.20 region where prior reaction highs are expected to cap further advances on first test. A sustained move above 100.20 would open the way toward 100.80, while failure to hold above 99.00 would downgrade the current bullish bias toward a more neutral daily outlook.
(The technical analysis of this story was written with the help of an AI tool.)
DXY daily chart
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.69% | 0.60% | 0.44% | -0.06% | 0.50% | 0.26% | 0.44% | |
| EUR | -0.69% | -0.09% | -0.24% | -0.74% | -0.19% | -0.42% | -0.25% | |
| GBP | -0.60% | 0.09% | -0.15% | -0.65% | -0.10% | -0.33% | -0.16% | |
| JPY | -0.44% | 0.24% | 0.15% | -0.49% | 0.06% | -0.18% | -0.00% | |
| CAD | 0.06% | 0.74% | 0.65% | 0.49% | 0.55% | 0.32% | 0.49% | |
| AUD | -0.50% | 0.19% | 0.10% | -0.06% | -0.55% | -0.23% | -0.07% | |
| NZD | -0.26% | 0.42% | 0.33% | 0.18% | -0.32% | 0.23% | 0.17% | |
| CHF | -0.44% | 0.25% | 0.16% | 0.00% | -0.49% | 0.07% | -0.17% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Societe Generale analysts Michael Haigh and Ben Hoff say Brent has surged above $100/bbl as Middle East supply losses deepen and flows through the Strait of Hormuz largely cease. They estimate around 17 mb/d of supply is stranded, with most OPEC+ spare capacity trapped.
Record premia and mounting supply risks
"The oil price spike is, for now, driven by elevated risk premia, but upside and real fundamental risks are mounting rapidly. Brent has pushed firmly above the $100/bbl threshold, trading at $107/bbl at the time of writing, previously closing at $92.69/bbl on Friday, as supply losses across the Middle East continue to deepen and uncertainty grows. We assume a longer disruption to transits through the Strait of Hormuz than the original scenario we discussed last week, while continuing to stress the high uncertainty around this timeline."
"Most OPEC+ spare capacity (about 4 mb/d) is trapped behind Gulf export bottlenecks, rendering near‑term policy interventions ineffective. Even Saudi Arabia’s pre‑conflict ramp‑up toward 10.9 mb/d does little to ease global supply unless export routes re‑open. De facto, OPEC+ policy is on hold until the Strait normalises. The G-7 discussing possible joint release at an emergency meeting today."
"Given the elevated physical risks and the absence of an imminent solution, we expect to adjust our price forecasts shortly. The market is still pricing predominantly geopolitical risk, and the cumulative build in geopolitical risk premia since early January is roughly $50/bbl, the highest level ever, reflecting a situation that is totally unprecedented."
"On current information, flows through the Straits have all but ceased, except for Iranian vessels. Estimated flows through the Straits are down by roughly 17 mb/d (so 10% of normal flows are currently occurring), as shippers remain in “wait‑and‑see” mode. Redirection of oil via pipelines and the ports in Yanbu (Saudi Arabia, Red Sea) are around 1mb/d versus a potential of perhaps up to 2.5mb/d more as 10 million barrels were loaded in the first four days of March implying a 2.5mb/d run rate."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The Indian Rupee sinks to a fresh all-time low at around 92.80 against the US Dollar amid escalating Iran conflict.
- Oil prices climb over 25% above $110 as the US and Israel attack several Iranian oil depots.
- Investors await the US/India CPI data for February.
The Indian Rupee (INR) sinks to a fresh all-time low against the US Dollar (USD) on Monday, with the USD/INR pair surging to near 92.80. The pair rallies as the Indian Rupee faces the heat of the boiling oil prices, and the US Dollar strengthens due to risk-off market sentiment and higher oil prices.
On the NYMEX, WTI oil price is up over 25% above $110.00 as the United States (US) and Israel, in a joint operation, have started hitting oil depots in Iran, BBC reported.
Currencies from nations like India that rely heavily on oil imports to fulfill their energy needs remain highly sensitive to changes in oil prices. Meanwhile, rising oil prices are a favorable situation for the US Dollar, given that the US is the net exporter of oil.
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, reclaims its over three-month high of 99.70.
Regarding the massive rally in the oil price, US President Donald Trump stated through a post on Truth.Social that it is a “very small price to pay” against Iran’s nuclear threats.
Surging oil prices have badly impacted the Indian stock markets. Nifty50 dives almost 3% below 23,750, the lowest level seen in over 11 months. Meanwhile, foreign investors continue to dump their stake in the Indian equity market as the Iran war rages on. Foreign Institutional Investors (FIIs) have remained net sellers in all four trading days so far this month, and have offloaded their stake worth Rs. 21,831.19 crore, according to data from NSE.
On the macroeconomic front, investors will focus on the Consumer Price Index (CPI) data for February, which will be released on Thursday. Also in the US, the inflation data on Wednesday will be a major trigger; however, its impact on speculation for the Federal Reserve’s (Fed) monetary policy outlook would be limited as it lacks the impact of surging gasoline prices amid the Iran conflicts.
The price of gas in the US reached an average of $3.41 per gallon on Saturday, according to The New York Times (NYT).
According to the CME FedWatch tool, traders are confident that the Fed will not cut interest rates in the upcoming three policy meetings.
Technical Analysis: USD/INR refreshes all-time high near 92.80
-1773031358506-1773031358510.png)
USD/INR trades higher at around 92.80 as of writing. The pair maintains a bullish near-term bias as price extends above the rising 20-day Exponential Moving Average, confirming the latest upswing from the 91.00 area. Momentum remains firm, with the 14-day Relative Strength Index (RSI) holding in the 70 zone, signaling strong buying pressure rather than exhaustion at this stage. The sequence of higher closes since mid-range consolidation around 90.80 reinforces the upside structure and keeps dip-buying favored while the pair holds above its recent breakout region.
Initial support emerges at 92.25, where a minor pullback base formed ahead of the current high, followed by 92.00 as the next downside level before stronger support near the 20-day EMA around 91.60. A break below this cluster would weaken the bullish tone and open room toward 91.25. On the topside, immediate resistance stands at the 92.75 area, with a sustained break exposing the 93.20 region as the next upside objective. As long as price holds above 92.25, the path of least resistance remains to the upside.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Consumer Price Index (YoY)
Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Wed Mar 11, 2026 12:30
Frequency: Monthly
Consensus: 2.5%
Previous: 2.4%
Source: US Bureau of Labor Statistics
The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
- The Pound Sterling underperforms against the US Dollar amid the risk-off market mood.
- The war in the Middle East has improved the safe-haven demand of the US Dollar.
- Investors await the US CPI and the UK GDP data.
The Pound Sterling is down 0.5% to near 1.3350 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair tumbles as the US Dollar (USD) outperforms its peers, with demand for safe-haven assets remaining firm, amid war in the Middle East between the United States (US), Israel, and Iran.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.63% | 0.50% | 0.41% | -0.19% | 0.41% | 0.26% | 0.26% | |
| EUR | -0.63% | -0.13% | -0.18% | -0.81% | -0.22% | -0.36% | -0.36% | |
| GBP | -0.50% | 0.13% | -0.08% | -0.68% | -0.09% | -0.24% | -0.24% | |
| JPY | -0.41% | 0.18% | 0.08% | -0.60% | -0.01% | -0.16% | -0.16% | |
| CAD | 0.19% | 0.81% | 0.68% | 0.60% | 0.60% | 0.45% | 0.45% | |
| AUD | -0.41% | 0.22% | 0.09% | 0.00% | -0.60% | -0.14% | -0.15% | |
| NZD | -0.26% | 0.36% | 0.24% | 0.16% | -0.45% | 0.14% | 0.00% | |
| CHF | -0.26% | 0.36% | 0.24% | 0.16% | -0.45% | 0.15% | -0.01% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.5% higher to near 99.35.
The outlook of the US Dollar remains firm as the war in the Middle East could escalate further, following the announcement of Mojtaba Khamenei as Iran’s new Supreme Leader. US President Donald Trump said last week that the choice for Iran’s new supreme leader would be “unacceptable”, and he intends to pick a new one for them.
On the macroeconomic front, investors await the US Consumer Price Index (CPI) data for February, which will be released on Wednesday. In the United Kingdom (UK), investors will focus on the monthly Gross Domestic Product (GDP) and the factory data for January, which is scheduled on Friday.
GBP/USD technical analysis
-1773044253623-1773044253624.png)
GBP/USD trades sharply lower at around 1.3350 as of writing. The near-term bias is bearish as spot holds below the 20-day exponential moving average, which is around 1.3466 and capping rebounds.
The 14-day Relative Strength Index (RSI) slides to near 35.00, confirming a downside momentum after failing to sustain earlier recoveries, keeping sellers in control while the pair trades beneath the recent cluster of short-term averages.
Initial resistance emerges at the 20-day EMA, followed by the 38.2% Fibonacci retracement at 1.3539. On the downside, immediate support sits near the March 3 low of 1.3254, and a clear break below this area would expose the next bearish objective toward 1.3190, the 78.6% retracement, as the broader corrective phase deepens.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
ING’s Chris Turner highlights that strong support just below 1.1500 in EUR/USD is increasingly at risk as elevated Oil prices hurt Europe’s terms of trade. Despite narrowing US–eurozone rate differentials, he sees only limited upside on any IEA-driven relief rally. ING warns that a break below 1.1475/1.1500 could trigger a quick move toward 1.1400.
Energy shock weighs on Euro outlook
"Big support just below 1.1500 in EUR/USD remains vulnerable. The longer energy prices stay high, the greater the damage to the 2026 narrative of synchronised global growth and Europe playing catch-up with US exceptionalism. Even though US-eurozone rate differentials are narrowing in favour of the euro, the energy-driven terms of trade shock is having a much bigger effect on EUR/USD."
"Back in 2022, the IEA released 62 and then 120 million barrels at the start of March and April, respectively, to address the spike caused by the Russian invasion of Ukraine. The FT is reporting that the US is pushing for a huge 300-400m barrel release, marking a whopping 25-30% of IEA stocks. Such a huge release might bring some temporary calm to energy markets and knock the dollar off its highs."
"We could see a brief bounce in EUR/USD today should the IEA get anywhere near that 300-400m barrel release (though that seems very optimistic), but it looks like position adjustment will mean that EUR/USD struggles to make it much above the 1.1600 area now."
"Below 1.1475/1.1500, expect trade volatility to surge as EUR/USD could make a run at 1.1400 in fast markets."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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