The USD firms, oil prices rally, equity markets are down, and US yields are mixed amid waning risk sentiment due to the widening Iran conflict. The US Dollar firms as investors seek safety amid escalating tensions between the US and Iran, with rising geopolitical risks underpinning haven demand. Stronger oil prices and broader risk-off sentiment have bolstered the greenback as markets reassess global risk exposure. Attention will also be on today’s US Manufacturing PMI, which could influence near-term Dollar momentum depending on the strength of the reading. Global equities slumped after the outbreak of military conflict in Iran triggered a sharp risk-off move across markets. US futures fell more than 1%, European stocks dropped nearly 2%, and emerging-market equities posted their biggest decline in weeks as oil prices surged following disruptions to the Strait of Hormuz. Investors remain cautious, with strategists warning that a prolonged conflict and sustained energy spike could create deeper and longer-lasting headwinds for stocks. Elsewhere, oil prices have spiked sharply amid escalating conflict in the Middle East, with Brent crude rising as much as 8–9% after U.S. and Israeli strikes on Iran and fears of supply disruptions through the Strait of Hormuz. Gold and Bitcoin both strengthened in early trading as investors reacted to heightened geopolitical tensions and broader market uncertainty. Investors will continue focus on the Iran conflict, alongside the US Manufacturing PMI report, and ECB President Lagarde's speech to help provide direction to currency markets.
In the news. Oil & Gas prices soar, and stocks slide as the Middle East conflict escalates. The war widens across the Middle East as American Jets downed in Kuwait. Starmer will let the US use UK bases for attacks on Iranian missile sites. Third day of Middle East turmoil, Trump says the assault on Iran could last weeks. US officials skeptical of regime change in Tehran after Khamenei killing, sources say. Iranian-made drone hits British Air base in Cyprus. Eurozone factory growth hit a 44-month high in February, according to the PMI. China's annual parliamentary meeting to unveil a roadmap for the tech race with the West. Amazon AWS reports outage after UAE data centre struck by 'objects'.
In currency markets. The South African Rand weakened sharply against the US Dollar amid rising geopolitical tensions and a broader risk-off shift that pressured emerging-market currencies. The Chinese Yuan also eased, reversing recent gains as softer sentiment and policy adjustments weighed on the currency. CNY eased 0.35%, and Asian currencies on average dropped 0.5% against the USD. Trading currencies came under selling pressure, with SEK, ZAR, CZK & PLN tumbling 1%, DKK dropping 0.7%, CHF & JPY weakening 0.6%, and KWD, NOK, AUD, NZD & MXN falling 0.4% against the USD.
In commodity markets. Oil prices rallied 7.5%. Natural Gas prices strengthened 4.5%. Gold prices advanced 3%. Silver prices gained 2.5%. Copper, Coffee & Soybean prices are flat, and Wheat prices firmed 0.3%.
CAD slips against the US Dollar in early trading but continues to outperform most of its G7 peers, supported by rallying oil prices amid escalating tensions in Iran. While safe-haven demand boosts the greenback, strength in commodities helps cushion downside pressure on the loonie. Focus now turns to today’s Canadian Manufacturing PMI and Friday’s Ivey PMI report for further direction.
EURCAD weakens toward the 1.6000 mark as the Canadian Dollar draws support from strengthening commodity prices, particularly oil. Rising energy prices continue to underpin the loonie, putting downward pressure on the cross.
EUR falls below 1.1750 as the US Dollar strengthens on heightened risk aversion following the US–Israel strike on Iran. Escalating regional tensions have fueled safe-haven demand for the greenback, overshadowing upbeat Eurozone PMI data showing factory activity at a 44-month high. Unless geopolitical tensions ease, the Dollar is likely to remain supported in the near term.
GBPEUR edges lower as the Euro finds support from the ECB’s cautious stance on inflation and wage pressures, with Christine Lagarde reaffirming that price growth is on track to return to target over the medium term. Sterling remains weighed down by rising Bank of England rate cut expectations following soft labour data and renewed political uncertainty after Labour’s by-election defeat.
GBP struggles near the 1.3500 area as Sterling remains under pressure amid heightened geopolitical tensions following the US–Israel strikes on Iran, which have boosted safe-haven demand for the Dollar. Risk aversion has weighed broadly on the Pound, compounding existing domestic headwinds. In the UK, softer labour data have reinforced expectations of the Bank of England easing, though Chief Economist Huw Pill has cautioned against complacency on inflation. Political uncertainty following Labour’s recent by-election setback has added another layer of pressure on Sterling.
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