Published: 09/03/2026 By ECAP
AT A GLANCE
The British Pound srose as Middle East tensions lifted energy prices, reducing expectations for near-term Bank of England rate cuts despite mixed UK data.
The Euro's weakened on poor German retail sales, rising energy costs, Middle East tensions, and US trade frictions, heightening concern over Eurozone economic fragility.
The U.S. Dollar supported by safe-haven demand amid Iran conflict and rising oil prices, as investors weigh inflation risks, growth concerns and shifting rate expectations.
GEOPOLITICS RULES
The British Pound strengthened last week, supported by Middle East tensions that drove sharp volatility in energy markets and lifted oil and gas prices. Rising energy costs prompted investors to scale back expectations for near-term Bank of England rate cuts, boosting Sterling. Although mixed UK services PMI data and labour market concerns briefly tempered momentum, the currency maintained an upward bias as markets reassessed inflation risks.
The Euro faced pressure last week amid weaker German retail sales and concerns that surging energy prices could weigh on the Eurozone’s fragile economy. Escalating Middle East tensions and trade frictions with the United States further dented sentiment. While markets also adjusted interest rate expectations, the region’s greater exposure to rising energy costs left the currency vulnerable to continued geopolitical uncertainty.
The US Dollar has drawn support from safe-haven demand as the Iran conflict and surging energy prices unsettle markets. Investors are weighing the United States’ relative insulation from energy shocks against global growth risks. Oil-driven inflation concerns are also shifting interest-rate expectations, while labour and business data guide sentiment. If energy disruption persists, tighter conditions and inflation uncertainty could keep demand for the dollar firm.
Data supplied by GC Partners