Oil drops 12% but markets remain on edge
Global markets stayed tense overnight even as oil extended Monday’s sharp reversal, falling as much as 12% on hopes the International Energy Agency may soon release emergency stockpiles.
Despite the pullback, sentiment remained fragile given ongoing supply disruptions around the Strait of Hormuz and uncertainty around strategic reserve releases. US shares ended flat after opening much stronger. Bloomberg reports Middle East nations have cut production by as much as 6.7 million barrels per day. Global production is broadly around 100 million barrels per day
Aussie leads gains as it climbs to four‑year highs
In currency markets, the Australian dollar led gains, hitting its highest level since June 2022 on speculation the Reserve Bank of Australia could hike rates again next week.
AUD/USD rose 0.6%.
RBA Deputy Governor Andrew Hauser said yesterday that the surge in oil prices will likely push inflation above the central bank’s 4.2% forecast, warning that failing to act could result in “toxic” inflation.
The move in AUD/USD extends the broader rally that has lifted the pair nearly 6% in 2026.
Stronger risk sentiment also supported the Aussie, with emerging‑market currencies climbing 0.9% — their best one‑day performance since 2023.
Major oil‑importing currencies lagged. EUR/USD fell 0.2%, GBP/USD lost 0.1%, and NZD/USD eased 0.1%.
In Asia, the greenback weakened as USD/JPY fell 0.2%, while USD/CNH and USD/SGD each slipped 0.1%.
US inflation leads today’s data
In the US, inflation remains the key focus, with February’s CPI expected to show annual inflation holding at 2.4%, matching January and marking the lowest level since mid‑2025.
Core inflation is forecast to stay firm at 2.5% year-on-year, reinforcing the message that price pressures are easing only gradually.
US CPI is due at 11.30pm AEDT.
But with this data captured before the US strikes on Iran, Federal Reserve commentary on whether policymakers are willing to look through short‑term price spikes will matter more for shaping rate expectations than tonight’s historical data.
Aussie highest since June 2022
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 9 – 14 March
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
