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US inflation data on Wednesday is the week's centrepiece, but with oil nearing seven-month highs, Bitcoin (BTC) sentiment shifting, and the Australian dollar at three-year highs, traders have plenty to navigate in the week ahead.
Quick Facts
- US inflation rate (February) is the key binary event for rate cut pricing and equity direction.
- Brent crude is trading around US$82–84/bbl, near seven-month highs, with a $4–$10 geopolitical risk premium baked in from Iran/Hormuz tensions.
- Bitcoin is trading above US$70,000 as of 6 March, a potential trend change if it holds through the week.
United States: inflation in focus
Last month’s US inflation reading showed prices rising 2.4% year-on-year, still well above the Fed's 2% target.
February's inflation rate, due Wednesday, will be scrutinised for signs that tariff pass-through or rising energy costs are pushing prices back up, or whether the slow grind lower is still intact.
The March FOMC meeting on 17–18 March is now priced at only an 4.7% probability of a cut. A higher-than-expected inflation print this week could potentially push rate cut expectations further out.
A softer read opens the door to renewed cut pricing and potential relief across risk assets.
Key Dates
- US Inflation Rate (February CPI): Wednesday 11 March, 12:30 am (AEDT)
Monitor
- Core vs. headline inflation divergence as evidence of tariff pass-through in goods prices.
- 2-year and 10-year treasury yield sensitivity to the print.
- USD direction and FedWatch repricing in the lead up to the 18 March FOMC decision.
Oil: elevated and event-sensitive
Brent is currently trading around US$83–85 per barrel, with a 52-week range spanning $58.40 to $85.12, reflecting the dramatic move triggered by the Middle East conflict.
Analysts estimate the geopolitical risk premium already baked into oil at US$4–$10 per barrel, and average 2026 Brent forecasts have been lifted to US$63.85/bbl, up from US$62.02 in January.
The EIA's Short-Term Energy Outlook forecasts Brent to average $58/bbl in 2026, well below the current spot price.
The gap between spot and the forecast baseline could be a useful frame for traders this week: any de-escalation signal from the Middle East could rapidly close that gap.
Monitor
- Strait of Hormuz developments and any diplomatic signals from Iran nuclear talks.
- EIA weekly oil inventory data.
- Oil's knock-on to inflation expectations and whether it shifts central bank posture.
- Energy sector equity performance relative to the broader market.
Bitcoin: sentiment watch
BTC has been attempting to stabilise after a brutal 53% correction over the past 17 weeks, fuelled by escalating geopolitical tensions and renewed tariff concerns.
However, yesterday saw a 8% jump back above $72,000, and the crypto “fear and greed index” jumped up to 29 (fear), up from below 20 (extreme fear), where it has been sitting for over a month, indicating a potential sentiment shift.
A cooler-than-expected US inflation print on Wednesday could provide further fuel for the breakout; a hot print risks potentially pulling BTC back below the US$70,000 level it has just reclaimed.
Monitor
- Inflation print reaction on Wednesday as the primary macro catalyst for the move.
- Any rotation into altcoins following BTC strength.
- ETF inflow/outflow data as confirmation of institutional participation.
AUD/USD: Hawkish RBA meets geopolitical crosswinds
The Aussie is trading near more than three-year highs and heading for its fourth consecutive monthly gain, up more than 6% year-to-date, making it the top-performing G10 currency in 2026.
The driver is a clear policy divergence. RBA Governor Michele Bullock signalled the March policy meeting is "live" for a possible rate increase, and warned that an oil price shock from Iran tensions could reignite domestic inflationary pressures.
Market pricing now suggests around a 28% chance of a 25bp hike at the upcoming meeting, while fully pricing in tightening through May, and around a 75% chance of another increase to 4.35% by year-end.
This hawkish read, set against a Fed on hold and facing dovish political pressure, creates a potential structural tailwind for the Aussie.
Monitor
- AUD/USD reaction to Wednesday's US inflation data.
- RBA rate hike probability repricing through the week.
- Iron ore and commodity prices as secondary AUD drivers.
- China demand signals, given Australia's export exposure.
USD was flat on Tuesday with the US dollar index (DXY) trading either side of the 200-day SMA and 50% Fib level at 103.50. FX traders turning their attention to the pivotal FOMC rate decision on Wednesday followed by the non-farm employment report on Friday. A better than expected JOLTS job opening report lending some support early in the session to the USD.
EURUSD rebounded from lows of 1.0796 after Spanish CPI printed hotter than expected and no misses on various EZ GDP figures. EUR traders attention will now turn to the German and French CPI figures due today after the hot Spanish print. USDJPY was flat for the session, still holding below the psychological 148 level ahead of the rest of the weeks risk events.
The gap between US and JP 10-year yields and price growing which should put some downward pressure on this pair. AUD underperformed on disappointing retail sales figures ahead of today’s CPI print. AUDUSD did find support at its 200-day moving average at 0.6575 where it has revolved around for the last few sessions.
Look for this level to establish strong support should we get a hot Aussie CPI today.
USD was bid in Mondays session with the US Dollar Index following US treasury yields higher after hawkish comments from Fed Chair Powell over the weekend where he pushed back on market pricing of rate cuts starting in March. A beat in the ISM Services PMI data also supporting DXY as rate cut odds in March dropped down to around 17% from the 35% chance priced in at the close on Friday. JPY continued its decline with USDJPY printing a new high for 2024 at 148.89.
US 10 Year yields broke above 4%, seeing the US10Y – JP10Y rate differential jump higher and take USDJPY with it. USDJPY holding above the psychological 148 level and eyeing the 150 “intervention zone”. AUDUSD saw significant weakness with USD strength and a miss in the Chinese Caixin Services PMI weighing.
For AUD traders’ attention today will turn to the RBA rate decision at 14:30 AEDT. The Central bank is widely expected to hold rates steady, but it will be the accompanying statement that will generate the most interest, will the RBA take a note out the Feds book and push back against rate cut expectations? Gold dipped to 1-week lows on a stronger USD and a surge in yields making the non-yielding metal look less attractive.
XAUUSD dipping to a low of 1025 before finding some support and re-tracing modestly. Gold continuing to trade in the 2024 range of 2000 – 2070 USD an ounce. Both key levels to watch for Gold traders going forward.
USD started the session weaker with the US dollar index (DXY) hitting a low of 102.94, as it was weighed on by dovish economic data, with misses in ADP employment and Employment Cost Index. This turned around dramatically after what was seen as a hawkish result out of the FOMC where the Fed left rates unchanged as expected but pushed back on the markets expectation of near term rate cuts. Chair Powell also said he “does not think a March rate cut is likely”, this saw futures reprice to a 35% chance of a cut in March, from 50% going into the FOMC which was USD positive.
Ultimately DXY finishing almost unchanged on the day, with the 200-day SMA and 50% fib resistance still capping further upward momentum. JPY was the only G10 currency to outperform the greenback on Wednesday, with it showing strength pre and post the FOMC rate announcement. USDJPY dropping to test the big figure at 146 before finding some support.
Yield differentials between US-JP 10 Y tightening significantly the main driver in this pair and price plays catch up to the downside. A hawkish BoJ summary saw JGB yields move higher more than offsetting the hawkish reaction to the FOMC in US yields. AUDUSD dipped below 0.6600 after a cooler than expected CPI figure out of Australia weighed on the local currency, along with USD strength post FOMC.
The next big level to the downside for this pair is the 2-month low support at 0.6525, a level that could come into play with major US data still to come this week, headlined by Fridays NFP.
USD drifted lower in Tuesday’s session, the US dollar index retracing a good chunk of Mondays gains. Regional bank fears were at the fore, with NYCB continuing its steep decline in an otherwise quiet session news wise. This saw the haven of bonds bid, sending yields lower and dragging the USD down with them.
DXY dipping back below its 100 Day SMA. AUD outperform after a hawkish hold from the RBA in their February meeting on Tuesday. The Aussie Central Bank left rates unchanged as expected, but in a break with other major central banks, that have recently removed their tightening bias messaging, stated that further rate hikes cannot be ruled out.
AUDUSD pushing up to test the Support/Resistance level of 0.6525 which will be a key level to watch in the week ahead. Lower US yields causing a drop in yield differentials saw JPY gain, with USDJPY dipping below 148. A Reuters report that claimed that the BoJ is laying the groundwork to end NIRP by April also lending some support to the Japanese currency.
A weaker USD and some haven flows on bank fears saw gold bounce higher after two down sessions. XAUUSD continues to trade in a tight range with the upside capped at 2070 USD an ounce and good support to the downside around 2020.
USD was ultimately lower on Wednesday after a rollercoaster of a session. Broad risk-on sentiment early on saw the Dollar Index (DXY) plummet to hit a low of 102.77 until strong S&P Global Flash PMIs coupled with souring risk sentiment after a dismal US 5yr auction saw a sharp turn-around. DXY retaking the 103 handle at session end, with the 50% Fib resistance the level to watch on the upside.
CAD was under pressure with steep losses against all majors in the aftermath of the BoC rate decision. The Bank of Canada held rates at 5.0% as expected but the Bank's decision to omit language that it is prepared to raise rates further if needed was seen as a dovish and hammered the CAD lower, USDCAD moving higher to 1.3525 and looking set to re-test the resistance level at 1.3541. EUR saw decent gains against the USD.
Europe saw beats in Flash PMIs headline figures for EU, German and French Manufacturing which supported the single currency. Though EURUSD was unable to hold the key resistance and psychological level of 1.09 as USD strength returned later in the session. EUR traders also have the ECB rate decision to look forward to later in the session, the ECB is expected to hold, but as always it will be the messaging traders will be watching.
GBP also saw strength in the aftermath of strong UK PMIs, as manufacturing, Services, and Composite all topped expectations. GBPUSD rallied to test the trend line resistance before pulling back on USD strength, with 1.2772 being a key level to watch in today’s session.
USD saw gains on Thursday with the US Dollar index (DXY) pushing above 104 before again finding resistance at the 100-day SMA. A rise in UST yields after a better than expected jobless claims figures. In data ahead Dollar traders will be focussing on the US CPI revisions.
EUR was mostly flat vs the Dollar with EURUSD trading down to 1.0750 before rebounding. ECB speak saw Wunsch state he sees some indications, not strong ones, that wage growth is softening, while Holzmann suggested there is a chance the ECB will not cut rates this year. JPY was the G10 underperformer after commentary from BoJ officials that was perceived as dovish.
Deputy Governor Uchida hinting that the BoJ will not aggressively hike rates, even after ending NIRP. USDJPY jumped to a high of 149.46 with the move higher in rate differential also lending support to this pair. AUD and NZD sold off after softer than expected China inflation data.
AUDUSD dropping back below the key 0.65 level, NZDUSD testing support at 0.6075 before retracing modestly. This also saw AUDNZD drop for a 4 th straight session, down to 1.0650.