USD higher as oil prices spark fears
The global rush into safe havens continued overnight, with the US dollar surging while the euro, Australian dollar, and NZ dollar were the hardest hit in major FX markets.
The USD index gained 0.7% on Tuesday. EUR/USD fell 0.6%, AUD/USD lost 0.8% and NZD/USD dropped 0.9%.
Tensions in the Middle East have intensified, with Israel reporting a major strike on an Iranian location hosting a forum to elect a new leader. US President Donald Trump warned that the next Iranian leader might be “as bad.”
Oil prices gained further before easing after President Trump said the US Navy would escort oil tankers through the Strait of Hormuz. Brent crude, the most sensitive to Middle East supply disruptions, is up 12% so far this week.
Geopolitical fears remain elevated, and the ongoing rise in energy prices adds uncertainty to the central bank policy outlook.
RBA Bullock signals hawkish tilt
RBA Governor Michele Bullock struck a firmer tone on Tuesday, warning that demand in the economy is running hotter than supply and that labour markets remain tight. She added that it’s unclear whether current financial conditions are restrictive enough to bring inflation back to target on time.
The key question now is timing: will the RBA wait until May to act, or move sooner as oil-driven price pressures risk pushing inflation higher? Current market pricing suggests only minimal odds of a March move, but that could shift quickly if the bank decides conditions aren’t tight enough. May and June also look pivotal — if inflation proves sticky, back‑to‑back hikes could follow.
Markets are leaning toward a May rate hike.
The AUD/USD plunged overnight, falling below 0.7000 before rebounding, and is now trading about 1.5% below its recent high of 0.7147 from 12 February.
Next support sits at the 50‑day EMA at 0.6927.
Asia FX falls even as Fed voices lean toward patience
Cleveland Fed President Beth Hammack said rates could stay on hold for an extended period as policymakers watch how the economy responds to recent cuts. She stressed patience over fine‑tuning, noting her forecast suggests rates may remain unchanged for some time.
Dallas Fed President Lorie Logan echoed that stance, saying she supports holding steady unless the labour market shows clear weakness. She added that the coming months will reveal whether inflation is moving toward target and whether job conditions remain stable.
In Asia FX, USD/SGD has jumped higher in recent days amid geopolitical tensions. Key resistance sits at the 100‑day EMA of 1.2810. Support lies at the 21‑day EMA of 1.2686, where buyers may look to step in.
USD/CNH also climbed, with the pair now up 1.4% from last week’s three‑year lows.
USD continues gains
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 2 – 7 March
All times AEDT
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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.
