The US Dollar eased on Wednesday after a two-day rise pushed the US Dollar Index (DXY) near 100.00, before it fell towards 98.80. February ADP Employment Change was 63K versus 50K expected, and January was revised to 11K from 22K. February ISM Services PMI came in at 56.1, compared with 53.5 expected and 53.8 previously. Market attention also centred on escalating attacks involving the United States, Israel and Iran.

Major Currency Moves

EUR/USD traded near 1.1640 as Eurozone January PPI rose 0.7% month-on-month, versus 0.2% expected and -0.3% previously. GBP/USD hovered around 1.3370, while rates pricing for a Bank of England cut shifted from 74% to 25% following higher oil prices. USD/JPY traded near 157.00 and AUD/USD around 0.7070 ahead of Australia’s January Trade Balance. Gold traded at $5,149, while oil held near 74.10 after a $77 peak, following Iranian forces seizing the Straight of Hormuz, affecting Asia’s oil trade. Next data includes Australian Trade Balance, Eurozone Retail Sales, US Challenger Job Cuts, Initial Jobless Claims, and US productivity and labour costs. Friday brings Germany Factory Orders, Eurozone employment and GDP, plus US NFP, Retail Sales, and the Unemployment rate. Central banks added 1,136 tonnes of gold worth about $70 billion in 2022, the highest annual purchase on record. Gold often moves inversely to the US Dollar, US Treasuries, and risk assets. The date today is 2026-03-05T02:51:22.689Z.

Looking Back One Year

We remember this time last year when the US-Iran conflict showed that strong US economic data, like the ADP and ISM reports, can become irrelevant. Market sentiment was driven entirely by geopolitical fears, pushing the US Dollar down even with positive numbers. This serves as a key reminder that headline risk can instantly override fundamentals. The seizure of the Strait of Hormuz in 2025 sent oil prices spiking to $77, which we now know was the peak of the crisis. While tensions have eased, WTI crude is currently trading around a volatile $85 per barrel as of March 2026, reflecting a persistent risk premium in global supply chains. This elevated base price continues to influence inflation expectations for all major economies. Gold’s role as a safe haven was clear when it hit $5,149 an ounce during the peak of last year’s turmoil. Today, it has settled near $4,800, with much of that price floor supported by continued central bank buying, which saw a net increase of over 950 tonnes in 2025. This shows that institutional players are still hedging against underlying instability. A year ago, the Dollar Index (DXY) fell to 98.80 as the US was a direct party to the conflict. Now, with a fragile peace in place, the DXY is trading much stronger around 104.50, driven by the Federal Reserve’s focus on inflation, which clocked in at a stubborn 3.1% year-over-year for February 2026. This pivot means that interest rate expectations are firmly back in the driver’s seat for the dollar. Consequently, we see interest rate differentials dominating currency pairs once again. The USD/JPY has pushed up to the 162.00 region, far from the 157.00 level seen during the dollar’s weakness in March 2025. Similarly, with the oil shock abated, GBP/USD has fallen to around 1.2550 as the Bank of England’s focus returns to sluggish domestic growth. Create your live VT Markets account and start trading now.

Start trading now – Click here to create your real VT Markets account