The currency is maintaining a steady tone ahead of today’s Federal Reserve decision, which will be announced at 20:00 (GMT+2). Analysts are almost certain that the interest rate will remain within the 3.50–3.75% range, while the market’s focus is on signals from policymakers بشأن their next steps. Given that headline inflation reached 2.4% year-on-year in February and core inflation stood at 2.5%, both above the 2.0% target, and considering the likely acceleration of inflation amid the escalation of the US-Israeli conflict, the regulator may hint at keeping current monetary policy in place for longer or even tightening it again by the end of the year. At the same time, most traders still expect borrowing costs to be reduced by 25 basis points in September 2026 and possibly once more at the end of 2027, while major financial institutions are looking for two rate cuts this year, with the first one in autumn. In particular, analysts at The Goldman Sachs Group Inc. expect 25-basis-point adjustments in September and December. Meanwhile, in February the producer price index slowed from 0.8% to 0.5% month-on-month against preliminary estimates of 0.3%, while accelerating from 3.5% to 3.9% year-on-year versus expectations of 3.7%, confirming the possibility of stronger inflationary pressure.
Eurozone
The euro is strengthening against the pound and showing mixed dynamics against the US dollar and the yen.
February inflation data for the EU were published today: the consumer price index rose from –0.6% to 0.6% month-on-month versus forecasts of 0.7%, and from 1.7% to 1.9% year-on-year, matching expectations, while the core indicator, as expected, accelerated from –1.1% to 0.8% and from 2.2% to 2.4%, respectively. Overall, the figures remain close to the 2.0% target, but analysts fear that if the US-Iran conflict continues, inflation could rise much more sharply, forcing the European Central Bank to shift toward tighter monetary policy. Nevertheless, at tomorrow’s meeting at 15:15 (GMT+2), analysts expect the key rate to remain at 2.15%, the deposit rate at 2.00%, and the marginal lending rate at 2.40%.
United Kingdom
The pound is weakening against the euro and showing mixed performance against the yen and the US dollar.
Finance Minister Rachel Reeves warned that inflation in the country may rise as a result of the Middle East conflict, although she did not specify the likely scale of any increase in consumer prices. Tomorrow at 14:00 (GMT+2), investors will focus on the outcome of the Bank of England’s monetary policy meeting. Analysts expect the regulator to leave the interest rate unchanged at 3.75%, so signals regarding officials’ next steps under conditions of elevated uncertainty are attracting much more attention. At present, the consensus forecast assumes current borrowing conditions will remain unchanged throughout 2026.
Japan
The yen is showing mixed dynamics against the euro, the pound, and the US dollar.
Investors and forex traders are assessing incoming macroeconomic data: exports rose by 4.2%, beating expectations of 1.6%, while imports increased by 10.2% instead of the forecast 11.5%, allowing the trade balance to reach 57.3 billion yen and confirming the recovery of the national economy. Even so, analysts fear that higher oil prices caused by the US-Iran conflict could slow industrial performance, putting pressure on production capacity and GDP. Tomorrow at 05:00 (GMT+2), the outcome of the Bank of Japan meeting will be published. Analysts expect the regulator to remain cautious and leave the interest rate unchanged at 0.75%, though it may hint at the timing of future tightening, especially after BOJ Governor Kazuo Ueda recently said that core inflation is gradually accelerating toward the 2.0% target. He also stressed that price growth should be accompanied by substantial wage increases.
Australia
The Australian dollar is weakening against the yen, the euro, the pound, and the US currency.
According to Reuters, Treasurer Jim Chalmers intends to push for additional tax reforms in the next state budget to counter the likely rise in inflation caused by higher oil prices as geopolitical tensions in the Middle East intensify. Meanwhile, February labor market data will be released tomorrow at 02:30 (GMT+2): unemployment is expected to remain at 4.1%, while employment growth is forecast to accelerate from 17.8% to 20.3%, which could support the national currency.
Oil
Oil prices are rising again as the Middle East conflict continues. Yesterday, the US-Israeli coalition attacked energy infrastructure at the South Pars field, prompting Iranian authorities to warn of possible strikes on facilities in neighboring countries, including the Samref refinery in Saudi Arabia, the Al Hosn gas field in the United Arab Emirates, and the Mesaieed petrochemical complex in Qatar. Such a scenario would further complicate energy production and transportation.
On the other hand, the asset’s positive momentum is being limited by weekly fuel reserve data from the American Petroleum Institute, which showed an increase of 6.600 million barrels. Today at 16:30 (GMT+2), a similar report from the US Energy Information Administration will be published. According to forecasts, inventories are expected to decline by 1.500 million barrels, which could provide additional support for oil prices.
