USD Weakens as Oil Relief and Inflation Data Take Centre Stage – What It Means for GBP, EUR and Global FX Markets

Key Highlight

• Markets have found some relief following reports that the International Energy Agency may coordinate a major global release of oil reserves.
• Improved risk sentiment has put pressure on the US dollar, which has now weakened for three consecutive sessions.
• Most major currencies have benefited from the softer dollar, with the euro and Australian dollar among the strongest performers.
• Attention now shifts to US inflation data, which could play a key role in shaping expectations for interest rates and near-term currency moves.

Market Recap

The US dollar moved lower for a third straight trading session as investor sentiment improved. Comments from Donald Trump and envoy Steve Witkoff suggested the US remains open to diplomatic discussions with Iran, easing some of the geopolitical tension that had recently supported the dollar.

The shift in tone encouraged risk appetite across financial markets. Global equities pushed higher while oil prices moved lower, helping drive the USD Spot Index down by roughly 0.4% during the session. Despite the move, markets remain cautious as the comments were light on concrete details and the broader geopolitical situation remains uncertain.

Across currency markets, most G10 currencies strengthened against the weaker dollar. The euro gained ground after remarks from ECB policymaker Madis Müller indicated that the likelihood of further interest rate increases has risen. Meanwhile, the Australian dollar outperformed as investors position ahead of next week’s Reserve Bank of Australia meeting.

Market Update

The dollar begins today’s session slightly weaker following reports that the International Energy Agency is considering what could become the largest coordinated release of global oil reserves on record. The move would be designed to offset the surge in energy prices triggered by the ongoing Middle East conflict and could surpass the 182 million barrel release implemented in 2022 after Russia’s invasion of Ukraine.

In currency markets, GBP/USD has recovered from recent lows and is currently trading at its highest level so far this month. However, the broader downtrend that has been in place since January remains technically intact.

Today’s main focus for markets will be the latest US inflation figures. February’s CPI data is expected to show inflation pressures remaining broadly stable. Headline CPI is forecast to rise to 2.5% year-on-year from 2.4%, with monthly inflation expected at 0.2%. Core CPI is predicted to ease slightly to 2.4% year-on-year from 2.5%, while the monthly reading is expected to hold at 0.3%.

While risk sentiment has improved following the early-week geopolitical concerns, markets currently view the recent move in currencies as a short-term reaction rather than a structural shift. As a result, further headlines around geopolitics, energy markets, and inflation data are likely to remain key drivers for FX markets in the coming days.

11th March 2026

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