Pound (GBP) rises against safer currencies
The increasingly risk-sensitive pound (GBP) strengthened against its safer peers yesterday, while struggling against riskier rivals, amid the rapid improvement in the market mood.
GBP was also buoyed by a sharp drop in UK government bond yields, which eased concerns about the state of the British public finances.
With UK data absent from the calendar again today, Sterling could continue to trade in a wide range.
Euro (EUR) dented by shifting ECB bets
The euro (EUR) fell against its stronger peers yesterday after the US-Iran ceasefire triggered a sharp drop in energy prices, prompting markets to scale back expectations of a European Central Bank (ECB) interest rate hike later this month.
In addition, a weaker-than-forecast recovery in German factory orders and a contraction in Eurozone retail sales pressured EUR.
Turning to today, mixed German data could mute the euro this morning. While German exports rebounded strongly in February, industrial production unexpectedly contracted.
US dollar (USD) tumbles in risk-on trade
The US dollar (USD) crumbled yesterday as investors abandoned the safe-haven currency in favour of riskier assets following the announcement of the US-Iran ceasefire.
Hopes that the de-escalation could lead to a full resolution of the conflict cheered markets, while also reviving bets that the Federal Reserve could cut interest rates this year.
The final US GDP reading for the fourth quarter of 2025 and new inflation data for February are both due out today. However, USD investors may remain focused on the Middle East, with concerns about the fragile ceasefire potentially supporting the ‘greenback’.
Canadian dollar (CAD) plunges in tandem with oil prices
The crude-linked Canadian dollar (CAD) plummeted yesterday as news of the US-Iran ceasefire saw oil prices tumble.
Oil price movements may remain the key catalyst for CAD today. If crude recovers amid geopolitical uncertainty, the Canadian dollar could recoup losses.
Australian dollar (AUD) softens amid ceasefire uncertainty
The Australian dollar (AUD) softened slightly overnight as the US-Iran ceasefire already started to show signs of strain, thereby souring the market mood.
New Zealand dollar (NZD) firms on growth hopes
The New Zealand dollar (NZD) managed to tick higher overnight after Reserve Bank of New Zealand (RBNZ) Governor Anna Breman said she still expects the New Zealand economy to grow in 2026.
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