Published: 19/03/2026 By ECAP
ESCALATION CONTINUES
The British Pound weakened as escalating conflict in the Persian Gulf undermined sentiment. An attack on Iran’s gas field signalled a widening war, raising risks to global energy supply and pushing oil and gas prices higher. Ongoing strikes and threats to Gulf infrastructure heightened uncertainty, while disruption in key shipping routes added pressure. Despite brief optimism over diplomacy, geopolitical tensions left the pound exposed to negative headlines.
The Euro traded in a subdued range as investors awaited the European Central Bank policy decision, with inflation data meeting expectations and offering little impetus. Cautious market sentiment also reflected escalating Persian Gulf tensions, where attacks on Iranian energy infrastructure raised risks to supply and prices. Despite limited direct movement, geopolitical uncertainty and rising energy costs kept the euro sensitive to shifts in inflation expectations..
The US Dollar initially weakened as improving risk sentiment reduced safe-haven demand, with investors more comfortable despite geopolitical tensions. However, a sharp escalation in the Persian Gulf, including attacks on key energy infrastructure, revived demand for the Dollar as a defensive asset. Rising energy risks and market uncertainty reinforced its appeal, though caution persists ahead of the Federal Reserve’s decision and future policy guidance.
Data supplied by GC Partners