Bank FX views in one page, covering the key drivers, clear bias by pair, and the week’s events that move markets.

USD

The escalating conflict between the United States and Iran is now a key driver of USD flows. The market is reacting through higher oil prices, weaker risk sentiment, and a bid for safe havens like the USD and government bonds. That risk premium can keep the dollar supported even if US data softens.

Scotiabank also flags that this week’s US labour data can reshape rate expectations quickly. A weak payrolls print would usually pull yields down and weigh on USD, but geopolitical stress can offset that by keeping defensive positioning in place.

EURUSD

Westpac’s broader profile keeps EURUSD biased higher through 2026, which aligns with a medium-term view of a softer USD once the risk premium fades. In the near term, EURUSD remains sensitive to two forces: US safe-haven demand versus any upside surprise in Eurozone inflation or activity data.

GBPUSD

Marc to Market stays cautious on the UK backdrop, pointing to weak momentum and a cooling labour market. In a risk-off environment, GBP typically underperforms because it behaves like a growth-sensitive currency.

They also highlight downside risk in GBPUSD in the weeks ahead, with the 1.3250 to 1.3300 area a key zone to watch if UK rates expectations soften further.

USDJPY

Westpac’s longer-term track points to USDJPY gradually drifting lower over time, but short-term price action will depend on headlines and positioning. BNZ notes that JPY moves can be sharp when markets are crowded and the narrative shifts quickly.

For traders, the near-term setup is tug-of-war: USD safe-haven support versus JPY’s own haven status, with volatility elevated while the conflict risk remains front and centre.

AUDUSD

Marc to Market is constructive on AUD, arguing the AUD’s post-RBA dip did not last and that firm inflation and labour prints can keep policy expectations supported. Westpac also keeps AUDUSD broadly supported across its forecast horizon.

Near term, AUD remains sensitive to risk sentiment. Higher oil can help commodities broadly, but if the shock tightens financial conditions and hits global growth confidence, AUD can still struggle.

NZDUSD

BNZ expects NZD to stay range-bound unless the geopolitics shock deepens. Their base view is that any conflict-driven NZD dip could be a buying opportunity if the disruption is temporary, but prolonged stress and a sustained oil spike would likely keep NZD under pressure.

Key levels remain clear: resistance near 0.6100 to 0.6120, and support around 0.5850 to 0.5875 near the 200-day moving average.

USDCAD

Marc to Market leans mildly CAD-positive for March and notes USD/CAD has struggled near the top of its range around 1.3700 to 1.3725. They see scope for a move back toward the lower end of the broader range near 1.3480 to 1.3500.

Oil is the swing factor. Higher crude can support CAD, but broad risk-off USD demand can blunt that benefit, so near-term price action may stay choppy and range-driven.

Other Pairs

Gold (XAUUSD): The conflict premium is supportive for gold via safe-haven demand and oil-linked inflation anxiety. If risk sentiment deteriorates further, gold tends to stay bid, especially if yields fall as growth fears rise.

Bias Table

Key Event Outlook

United States

The key focus is the labour market run-up to Friday’s non-farm payrolls. ADP, ISM employment components, jobless claims, and payrolls will shape rate pricing quickly. In normal conditions, weaker jobs would weigh on USD, but conflict risk can keep the USD supported via defensive flows.

Eurozone

Eurozone inflation is the main release to watch. A hotter CPI print can support the euro through rate expectations, but EURUSD will still be constrained if USD safe-haven demand stays strong.

United Kingdom

UK data matters, but the bigger driver is rate expectations and broader risk sentiment. GBP is vulnerable if markets stay defensive and gilt pricing shifts toward a softer path for the BoE.

Japan

JPY remains headline-sensitive. Any shift in BoJ expectations or political signalling can move USDJPY quickly, especially with positioning stretched and volatility high.

Australia

Australian GDP and China activity data are key inputs for AUD. The AUD can hold up when domestic data supports the RBA outlook, but risk sentiment remains the near-term swing factor.

New Zealand

NZ data and RBNZ expectations remain important, but NZD is mainly trading off global risk, oil, and broader USD direction. A sustained oil shock would be a headwind for NZD.

Canada

Oil remains the main driver. Higher crude typically supports CAD, but if markets remain risk-off, USD demand can cap CAD gains and keep USD/CAD range-bound.

Other and Geopolitics

The US–Iran conflict is the main macro shock for the week. Watch oil prices and any signs of disruption around the Strait of Hormuz. The bigger and longer the energy shock, the more it raises inflation risk and weakens growth confidence, which tends to lift volatility across FX.