After stumbling last week as US President Donald Trump imposed new global tariffs, the US dollar is poised to soar this week as a widening conflict in the Middle East looks set to dominate markets.
Last week’s key rate movements
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GBP/EUR – Unchanged on the week
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GBP/USD – Unchanged on the week
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EUR/USD – Up 0.3% on the week
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AUD/USD – Up 0.5% on the week
Pound (GBP)
The focus for GBP investors this week will be on Chancellor Rachel Reeves’s Spring Statement and accompanying forecasts from the Office for Budgetary Responsibility (OBR), with the pound (GBP) poised to strengthen if they offer an optimistic outlook for the UK economy.
Euro (EUR)
The Eurozone’s consumer price index may act as a headwind for the euro (EUR) this week if February’s preliminary figures report inflation remains below the European Central Bank’s (ECB) target.
US dollar (USD)
Developments in the Middle East, following the US and Israeli military strikes on Iran over the weekend, look set to underpin the US dollar’s (USD) safe-haven appeal in the coming days. However, Friday’s non-farm payrolls report may pose a risk to the ‘greenback’ at the end of the week, if the US labour market softened in February.
Australian dollar (AUD)
The release of Australia's latest GDP figures will act as a key catalyst of movement for the Australian dollar (AUD) this week. Expect to see the ‘Aussie’ strengthen if growth accelerated as forecast in the last quarter of 2025.
South African rand (ZAR)
South Africa will also publish its latest GDP figures this week. Analysts are predicting an acceleration of growth in the last quarter of 2025, which may underpin the South African rand (ZAR) in mid-week trade.
Canadian dollar (CAD)
While domestic data is in short supply this week, the sharp rise in oil prices amid the conflict in the Middle East is likely to underpin demand for the commodity-linked Canadian dollar (CAD).
New Zealand dollar (NZD)
In the absence of any notable NZD data releases, movement in the New Zealand dollar (NZD) is likely to be tied to market risk dynamics this week. Expect to see the ‘kiwi’ sink if risk sentiment remains weak amid heightened geopolitical uncertainty.
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