Global FX Market Overview for March 23–28, 2026 shows the US dollar regaining its central role as geopolitics and oil prices drove a clear defensive shift across currency markets.
🌍 This week’s FX action was dominated by US–Iran tensions and the risk of disruption around Hormuz. As oil prices climbed and inflation concerns returned, markets rotated back into the USD as a safe haven, helping DXY recover after its softer start to the week.
💵 The dollar’s strength was not driven by risk aversion alone. It was also supported by expectations that the Fed may keep rates higher for longer. With energy prices rising, markets repriced the easing path of major central banks, and that gave the greenback a clear edge in the second half of the week.
🇯🇵 JPY stayed the weakest major currency as Japan’s inflation backdrop remained too soft to support a stronger tightening path from the BoJ. USD/JPY moved back toward the 160 area, highlighting both the policy gap and rising concern over possible intervention if yen weakness deepens further.
🇦🇺 AUD and NZD were among the weakest performers as markets shifted into a broader risk-off stance. While higher oil can sometimes help commodity-linked currencies, this time the dominant effect was pressure on growth-sensitive assets, leaving both currencies under clear downside pressure against the USD.
🇪🇺 EUR and GBP also lost ground, though sterling remained more resilient than the euro. Weak growth expectations continued to weigh on EUR, while GBP found some support from the view that the BoE may stay cautious on inflation. Even so, both still struggled against broad USD demand.
⚠️ The key focus for next week remains Hormuz. If tensions keep rising, the USD may stay supported. If real diplomatic progress appears, markets could quickly swing back toward risk-on, giving EUR, GBP, and commodity currencies room to rebound.