Australian dollar (AUD) pressured by Middle East tensions
The Australian dollar (AUD) faced headwinds at the end of last week’s session as a further escalation of tensions in the Middle East sapped investor risk appetite.
Market sentiment grew increasingly negative as US President Donald Trump threatened a major retaliation against Iran this week, following its attacks on US allies in the Gulf.
While Australian data is in short supply today, Chinese industrial production and retail sales figures may reflect positively on the ‘Aussie’ if they outpace expectations.
New Zealand dollar (NZD) slides in gloomy trade
The New Zealand dollar (NZD) also retreated on Friday in response to the risk-averse market mood.
This week’s session opened with the publication of New Zealand’s latest services PMI, which looks to keep the pressure on the ‘kiwi’ after reporting a moderation of service sector activity in February.
Pound (GBP) slumps as UK GDP stalls
The pound (GBP) closed last week’s session on a sour note, after the UK’s latest GDP figures showed the economy got off to a slow start in 2026.
Figures published by the Office for National Statistics (ONS) showed that the economy unexpectedly stagnated in January, raising broader concerns about the UK’s economic trajectory amid the current inflationary backdrop.
Looking ahead, GBP data is thin on the ground until the second half of the week, leaving Sterling sensitive to wider market trends today.
Euro (EUR) remains muted amid energy uncertainty
The euro (EUR) was subdued on Friday amid ongoing concerns about how higher energy prices will affect Eurozone economic activity in the coming months.
This was compounded by the Eurozone’s latest industrial production figures, which reported that manufacturing activity was already soft before the threat of higher input prices.
If energy prices remain elevated and investors continue to favour the US dollar (USD), the euro will likely remain under pressure at the start of this week.
US dollar (USD) bolstered by ongoing geopolitical jitters
The US dollar (USD) continued to outperform most of its peers at the end of last week, as escalating tensions in the Middle East underpinned safe-haven demand.
However, the US dollar’s gains were tempered after the latest US GDP report saw growth revised down to just 0.7% in the last quarter of 2025.
Turning to the start of this week, the US dollar is likely to remain supported as the conflict in the Middle East stretches into its third week.
Canadian dollar (CAD) undermined by rising unemployment
The Canadian dollar (CAD) faced headwinds on Friday after Canada reported a larger-than-expected rise in unemployment last month.
Canada will publish its latest consumer price index at the start of this week’s session, with signs of sticky inflation potentially reviving demand for the ‘loonie’.
Data Releases
07:30 NZD Services NZ PMI (Feb)
22:30 CAD Inflation Rate (Feb)