The crisis in the Middle East continued to infuse markets with volatility last week, with early hopes for US-Iran peace negotiations guttering out by the end of the session. Expect to see more turbulence this week, with risk aversion potentially gripping markets if the war escalates further.
Last week's key rate movements
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GBP/EUR – Unchanged on the week
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GBP/USD – Down 0.3% on the week
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EUR/USD – Down 0.2% on the week
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AUD/USD – Down 1.7% on the week
Pound (GBP)
The only UK data of note this week will be the finalised GDP figures for the fourth quarter of 2025. If the data confirms that the British economy grew just 0.1% at the end of last year, the pound (GBP) could struggle.
Euro (EUR)
The Eurozone’s preliminary consumer price index for March is likely to be the key catalyst for movement in the euro (EUR) this week. If the conflict in the Middle East led to a spike in inflation, bets on a European Central Bank (ECB) interest rate hike in April could lift the single currency.
US dollar (USD)
On Friday, the latest US non-farms payroll figure is due out. If jobs growth was weak in March, following February’s sharp decline, worries about the health of the American labour market could increase expectations of a Federal Reserve rate cut this year, potentially weighing on the US dollar (USD).
Australian dollar (AUD)
The Australian dollar (AUD) could face headwinds this week, if the Reserve Bank of Australia’s (RBA) latest policy meeting minutes highlight dovish voices at the central bank.
South African rand (ZAR)
South Africa’s latest trade figures are the focus for ZAR investors this week. The South African rand (ZAR) could attract support if the data shows a widening trade surplus, as expected.
Canadian dollar (CAD)
The Canadian dollar (CAD) may struggle this week, with Canada’s latest GDP figures forecast to show that the country’s economy had a weak start to 2026. However, rising oil prices could help underpin the ‘loonie’.
New Zealand dollar (NZD)
An expected decline in New Zealand business confidence in March could drag on the New Zealand dollar (NZD) this week, particularly if the outbreak of war in the Middle East led to a sharper-than-expected deterioration.
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