US FX WRAP: Dollar lower to benefit of G10s ahead of a central bank heavy week

Analysis details (19:40)

The Dollar was lower to start the week, retracing some of the hefty gains seen last week amid the Middle East conflict, and was largely at the whim of oil prices. Over the weekend and today, there have been plenty of headlines/updates surrounding the topic, but nothing too escalatory. Trump did announce that the US struck Kharg Island, but avoided any oil infrastructure. Meanwhile, when Trump was asked about a deal with Iran, he said Iran wants to make a deal, and they are talking to our people. Further reports from Channel 12 suggested that Iran's Foreign Minister Araghchi and US Envoy Witkoff are reportedly in contact over text messages in recent days - apparently about ending the war. Elsewhere, traders await the upcoming Fed confab on Wednesday, where they are widely expected to leave rates unchanged, albeit with dissents.

G10 FX was firmer across the board, with Antipodeans the clear outperformers and supported by risk sentiment, but also ahead of the expected RBA hike overnight. There was little currency-specific newsflow on Monday, as price action was largely dominated by oil. However, modest weakness was seen in the CAD after cooler-than-expected inflation data for February, which comes prior to the BoC meeting on Wednesday. This week, there is a deluge of central bank decisions, including RBA, BoC, Fed, BoE, BoJ, ECB and SNB, amongst others.

In EMFX, Chinese data impressed overnight as retail sales and IP both surpassed expectations. Regarding US/China relations, Bessent said US-China trade meetings in Paris were "very good", and that we will see whether the Trump China visit goes as planned, but it is false to say that the trip may be delayed due to the Iran conflict. Meanwhile, China’s Trade Negotiator Li, in talks with the US, spoke about a possible extension of tariff suspensions and other matters.

16 Mar 2026 - 19:40- ForexUS Research- Source: Newsquawk