The Australian dollar has emerged as an unexpected haven amid the Iran crisis, rising to 71.68 US cents, its highest level since June 2022 and a 35-year high against the yen, supported by higher oil and gas prices and expectations of an RBA rate hike. Investors expect rates to rise on March 17, and Australia's position as a major energy exporter supports the currency. Markets forecast a roughly 33% chance of the Australian dollar reaching 75 US cents within three months, and the currency remains relatively resilient to global volatility.

European Central Bank policymakers, including Peter Kazimir, Christine Lagarde, and Villeroy, emphasized high inflation risks and the potential impact of conflicts such as the Iran war. Despite Kazimir's warning about a possible rate hike, most members stressed caution and patience. They believe negative oil supply shocks slow economic growth and raise inflation, and an early rate hike could trigger a recession. Markets expect about 33 basis points of rate increases by year-end, with a 60% probability of a hike in June, though no short-term decision has been announced.

Ayatollah Mojtaba Khamenei released his first official statement, largely repeating the positions of the previous leader. He emphasized the need to keep the Strait of Hormuz closed, describing it as a key leverage point. He also stated that the enemy must compensate for the damage inflicted; otherwise, Iran would retaliate by targeting their assets in the region. There are no signs of a potential agreement, and references to the Strait of Hormuz pushed oil prices up by about $2.

The UK economy nearly stalled at the start of 2026, with GDP showing little meaningful growth in January as the services sector the main engine of the economy weakened. Manufacturing and construction posted only modest gains of 0.1% and 0.2%. This raises doubts about the Bank of England’s forecast of 0.3% growth for the first quarter. Meanwhile, the Iran war and the surge in energy prices, with oil rising above $100, increase the risk of a new inflation shock and could delay interest-rate cuts. A weak labor market, higher mortgage rates, and rising fuel prices are also adding pressure on households and the broader economy