Pound Sterling (GBP)

The Pound Sterling came under renewed selling pressure amid escalating tensions in the Middle East. Investors favoured traditional safe-haven currencies, leading to a decline in the Pound against the US Dollar, Swiss Franc, and Japanese Yen. Additionally, mounting concerns over the UK economy—underscored by a notable contraction in GDP and growing speculation of interest rate cuts—further dampened sentiment toward Sterling. The Pound only managed to hold ground against more volatile, risk-sensitive currencies.

Euro (EUR)

The Euro remained steady as investors sought stability in the face of growing market uncertainty. With no significant economic releases from the Eurozone, the single currency found support in the risk-averse trading environment. However, forthcoming data on trade and industrial production is expected to reveal underlying weaknesses, potentially weighing on the Euro. For now, its perceived safety underpins its resilience, though future gains are likely to hinge on economic indicators.

U.S. Dollar (USD)

The US Dollar surged as investors moved into safe-haven assets following Israeli military action targeting Iran. The heightened geopolitical tension spurred a global flight to safety, boosting demand for the greenback across Asian markets. While recent soft inflation figures have tempered expectations for further rate hikes, the Dollar has gained on its haven status. Still, economists caution that inflation driven by new tariffs could pose future challenges. For now, however, geopolitical concerns remain the dominant force behind Dollar strength.