Predicting the week ahead: Ongoing Iran conflict keeps Oil at the center as investors reconsider the Fed’s stance

US Dollar Strengthens Amid Middle East Tensions

As the conflict involving the US and Israel against Iran nears its second week, the US Dollar (USD) has gained momentum. Iran's decision to block the Strait of Hormuz has led to a surge in oil prices, increasing inflation concerns and encouraging investors to seek refuge in stable currencies like the USD. The ongoing turmoil in the Middle East continues to influence financial markets, especially after Iran targeted oil tankers near the Strait of Hormuz, causing disruptions in a vital energy route.

The US Dollar Index (DXY) has surpassed the 100.00 threshold, currently hovering around 100.30 after four consecutive days of gains. Meanwhile, the Federal Reserve kept its interest rates steady at 3.50%-3.75% in January and is adopting a cautious approach ahead of its upcoming rate announcement on Wednesday.

Major Currency Movements

• EUR/USD is trading close to 1.1430, marking its lowest point since August 2025. The recent spike in oil prices is posing additional challenges for the Eurozone, which relies heavily on imported energy.
• GBP/USD is near 1.3240, dropping to levels last seen in December 2025. Despite a weak US jobs report, global energy developments continue to impact the UK economy.
• USD/JPY is trading around 159.60, with minimal gains throughout the day. The Japanese Yen (JPY) often benefits during periods of global uncertainty. If tensions escalate or threaten energy supplies, this pair may retreat from its nearly two-year high.
• AUD/USD stands at 0.7000, falling from 0.7100 as geopolitical risks and energy concerns weigh on risk-sensitive currencies like the Australian Dollar.

Commodities Update

• West Texas Intermediate (WTI) crude is trading at $97 per barrel, as government reserve releases have not managed to curb price increases. WTI reached $119 per barrel on Monday, a price not seen since 2022.
• Gold remains steady at $5,044.

Upcoming Economic Events and Central Bank Announcements

Key Speeches and Conferences

• Tuesday, March 17: ECB’s Nagel speech
• Wednesday, March 18: BoC Press Conference, FOMC Press Conference
• Thursday, March 19: BoJ Press Conference, SNB Press Conference, ECB Monetary Policy Statement, ECB Press Conference
• Friday, March 20: ECB’s Nagel speech
• Saturday, March 21: ECB’s Cipollone speech, Fed Chair Jerome Powell speech

Economic Data Releases

• Monday, March 16:
  • CNY Industrial Production (YoY) (Feb)
  • CNY Retail Sales (YoY) (Feb)
  • CAD BoC Core Consumer Price Index (YoY) (Feb)
  • CAD Consumer Price Index (YoY) (Feb)
  • USD NY Empire State Manufacturing Index (Mar)
  • USD Industrial Production (MoM) (Feb)
• Tuesday, March 17:
  • AUD RBA Interest Rate Decision
  • EUR Consumer Price Index (YoY) (Feb)
  • GER ZEW Survey – Economic Sentiment (Mar)
  • EUR ZEW Survey – Economic Sentiment (Mar)
  • USD ADP Employment Change (4-week average)
  • USD Pending Home Sales (MoM) (Feb)
  • JPY Merchandise Trade Balance Total (Feb)
• Wednesday, March 18:
  • EUR Core Harmonized Index of Consumer Prices (MoM) (Feb)
  • EUR Core Harmonized Index of Consumer Prices (YoY) (Feb)
  • EUR Harmonized Index of Consumer Prices (MoM) (Feb)
  • USD Producer Price Index (Feb)
  • CAD BoC Interest Rate Decision
  • US Factory Orders (MoM) (Jan)
  • US Fed Interest Rate Decision
  • US FOMC Economic Projections
  • NZD Gross Domestic Product (QoQ) (Q4)
  • NZD Gross Domestic Product (YoY) (Q4)
• Thursday, March 19:
  • AUD Employment Change s.a. (Feb)
  • JPY BoJ Interest Rate Decision
  • UK Employment Change (3M) (Jan)
  • UK ILO Unemployment Rate (3M) (Jan)
  • UK BoE Interest Rate Decision
  • CHF SNB Interest Rate Decision
  • CHF SNB Monetary Policy Assessment
  • EUR ECB Main Refinancing Operations Rate
  • EUR ECB Rate On Deposit Facility
  • USD Initial Jobless Claims
  • USD Philadelphia Fed Manufacturing Survey (Mar)
  • USD New Home Sales Change (MoM) (Jan)
  • NZD Westpac Consumer Survey (Q1)
  • NZD Trade Balance NZD (YoY) (Feb)
• Friday, March 20:
  • CNY PBoC Interest Rate Decision
  • EUR Producer Price Index (MoM) (Feb)
  • EUR Producer Price Index (YoY) (Feb)
  • CAD Retail Sales (MoM) (Jan)
  • USD Fed Monetary Policy Report