Pound (GBP) subdued amid energy price uncertainty
The pound (GBP) struggled for direction on Thursday amid a lack of notable UK economic data and continued attention on developments in global energy markets.
As oil and gas prices pushed higher, analysts began to speculate about whether the government may need to step in with additional energy bill support later this year and the potential implications for the UK’s fiscal outlook.
Sterling is facing some pressure this morning after the UK’s latest GDP release revealed the economy unexpectedly stagnated at the beginning of 2026.
Euro (EUR) pressured by persistent USD demand
The euro (EUR) drifted lower yesterday as the single currency came under pressure from both rising energy costs and its negative correlation with the US dollar (USD).
Both factors were tied to developments in the Middle East, where Iran intensified efforts to disrupt global energy supply with new strikes targeting regional infrastructure and shipping routes.
Looking ahead, the Eurozone’s upcoming industrial production release could provide limited support to the euro if it shows factory activity rebounded across the bloc at the start of the year.
US dollar (USD) climbs amid renewed Middle East tensions
The US dollar advanced during yesterday’s session as escalating geopolitical tensions boosted demand for the safe-haven currency.
Further support came from the latest US initial jobless claims data after applications for unemployment benefits unexpectedly fell to 213,000 last week.
Attention now turns to the Federal Reserve’s preferred inflation gauge, the core PCE price index. If the measure increased as forecast in January, it could lend additional support to the US dollar.
Canadian dollar (CAD) supported by higher oil prices
The Canadian dollar (CAD) strengthened on Thursday as the latest rally in oil prices lifted the appeal of the commodity-linked currency.
However, these gains may come under pressure later today as Canada’s latest employment report is forecast to show unemployment edged higher last month.
Australian dollar (AUD) weakens amid risk-off sentiment
The Australian dollar (AUD) declined in overnight trading on Thursday as worsening risk sentiment linked to escalating Middle East tensions dampened demand for the risk-sensitive currency.
New Zealand dollar (NZD) falls in cautious trade
The New Zealand dollar (NZD) also came under notable pressure overnight as investors moved away from riskier assets amid the uneasy market backdrop.
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