Australian dollar (AUD) recovers after initial weakness
The Australian dollar (AUD) initially stumbled yesterday, as worries about escalating tensions in the Middle East saw markets shun the risk-sensitive ‘Aussie’.
However, an improvement in the market mood during the European and US trading hours helped AUD recover, as Pakistan said it was preparing to host ‘meaningful talks’ between the US and Iran in the coming days.
The Reserve Bank of Australia’s (RBA) policy meeting minutes could influence AUD today, with the ‘Aussie’ potentially wavering as markets digest the details.
New Zealand dollar (NZD) falls as sentiment sours
The New Zealand dollar (NZD) also fell amid the risk-off mood yesterday, with NZD struggling to stage as strong a recovery as the ‘Aussie’.
Turning to today, a forecast decline in New Zealand business confidence in March may dampen demand for the ‘kiwi’.
Pound (GBP) slips amid UK economic concerns
The pound (GBP) came under pressure at the start of the week, with a lack of notable data leaving Sterling unsupported.
In the absence of data, GBP investors focused on the fragility of the British economy and concerns about how another inflation shock could negatively impact the UK.
Looking ahead, Sterling could face pressure later on if the final UK GDP figures for the fourth quarter of 2025 confirm that the British economy grew just 0.1%.
Euro (EUR) unclear despite ECB rate hike bets
The euro (EUR) was mixed on Monday, with EUR weakening against stronger rivals despite a jump in German inflation prompting bets on a European Central Bank (ECB) interest rate hike in April.
The common currency’s strong negative correlation with the US dollar (USD) undermined EUR, while a decline in Eurozone economic sentiment in March also stifled the euro’s potential.
The key focus for EUR investors today will be the Eurozone’s preliminary consumer price index for March. An expected surge in inflation could further boost bets on a rate hike from the ECB in April, potentially supporting EUR.
US dollar (USD) extends upside as geopolitical uncertainty persists
The US dollar wavered higher yesterday as ongoing geopolitical uncertainty continued to boost demand for the safe-haven currency.
Despite some cautious optimism that peace talks may soon take place, worries about possible US attacks on Iranian energy sites saw oil prices surge, raising concerns about the impact on the global economy.
Overnight, the latest US Job Opening and Labor Turnover Survey (JOLTS) is due out. A decline in the number of job openings in February could weigh on USD.
Canadian dollar (CAD) buoyed by higher oil prices
The crude-linked Canadian dollar (CAD) firmed yesterday as oil prices retouched their recent highs. CAD was also able to sustain its upside despite energy prices cooling later in the session.
Canada’s latest GDP figures could influence the ‘loonie’ today. If they show that domestic growth remained anaemic at the start of 2026, CAD could weaken.
Data releases
10:00 NZD ANZ Business Confidence (Mar)
10:30 AUD RBA Meeting Minutes
16:00 GBP GDP Growth Rate (Q4)
19:00 EUR Inflation Rate (Mar)
22:30 CAD GDP (Feb)
00:00 USD JOLTs Job Openings (Feb)
00:00 USD CB Consumer Confidence (Mar)