Published: 04/03/2026 By ECAP
ENERGY TENSIONS
The British pound has edged higher against the Euro as UK government bond yields rise relative to those in the Eurozone. That shift has helped Sterling recover after a volatile start to the week. However, the broader backdrop remains uncertain. Rising tensions in the Middle East have pushed energy prices higher, creating fresh inflation concerns and keeping the Pound under pressure against the US Dollar.
The Euro remains under pressure as rising energy prices increase risks for the Eurozone economy. Europe relies heavily on imported energy, so higher oil and gas prices could weigh on growth while also pushing inflation higher. With the conflict in the Middle East still unfolding, investors are cautious. As a result, the Euro has struggled against the Dollar, which is benefiting from safe-haven demand.
The US Dollar is holding firm as investors move into safer assets amid rising geopolitical tensions. The conflict in the Middle East has unsettled global markets and pushed oil prices higher, increasing demand for the Dollar. Investors are also looking ahead to key US data this week, including employment figures on Friday, which could influence expectations for Federal Reserve interest rate policy.Data supplied by GC Partners