The dollar retreated on Monday from its highest levels in ten months, marking a cautious start to a week that will feature a series of central bank meetings taking place amid the US-Israeli war against Iran.

Among the institutions holding their first monetary policy meetings since the outbreak of the conflict in the Middle East are the US Federal Reserve, the European Central Bank, the Bank of England, and the Bank of Japan. These meetings are expected to give investors an indication of how policymakers assess the impact of rising oil prices on inflation and economic growth.

The dollar index edged slightly lower to below the 100-point level, but remained close to the ten-month high of 100.27 points recorded on Friday.

The dollar had benefited from investor demand for safe-haven assets since the start of the US-Israeli strikes on Iran at the end of February. In contrast, other major currencies such as the euro have come under pressure due to their economies’ reliance on oil imports.

Since the beginning of the conflict, investors have almost completely reversed their bets on a weaker dollar, according to weekly data released by the US market regulator.

However, the euro rebounded from a seven-and-a-half-month low recorded earlier in the session to trade 0.6% higher at $1.1485, while the British pound rose 0.46% to $1.3284, slightly above the three-and-a-half-month low it recorded on Friday.

Francesco Pesole, currency strategist at ING, said that the fact that central bank meetings are taking place this week gives markets an incentive to step back slightly for now.

He added that efforts by US President Donald Trump to secure an international coalition to guarantee safe passage for ships through the Strait of Hormuz may have also contributed to the dollar’s decline.

Over the weekend, Trump called on US allies to help secure the strait, saying his administration is holding talks with seven countries on the matter. The Wall Street Journal reported that Washington plans to announce early this week that several countries have agreed to escort ships through the waterway.

Nevertheless, oil prices continued to rise as geopolitical tensions persist and the end of the war, now in its third week, remains uncertain.

Reserve Bank of Australia leans toward a rate hike… Bank of Japan in a difficult position

The Australian dollar rose 1% to $0.705, supported by hawkish domestic interest rate expectations, as the Reserve Bank of Australia is expected to tighten monetary policy on Tuesday.

Markets now price about a 72% probability that the bank will raise interest rates by 25 basis points.

Carol Kong, currency strategist at the Commonwealth Bank of Australia, said that two additional rate hikes are now expected, one this week and another in May.

She added that in Australia inflation was already elevated even before the outbreak of the Middle East conflict, and the new energy price shock will increase the risk of higher inflation.

Meanwhile, the Japanese yen received some support, pushing the dollar down 0.4% to ¥159.1.

The yen had been under pressure due to Japan’s heavy reliance on energy imports from the Middle East, which has cast a shadow over interest rate expectations at the Bank of Japan.

Naomi Fink, chief global strategist at Amova Asset Management, said that the main risk for Japan is not only rising oil prices but also deteriorating trade conditions due to imported energy and logistics costs, alongside a weak yen and limited monetary policy flexibility.

She added that markets, especially the currency market, may be underestimating the likelihood that these pressures could force the Bank of Japan into more difficult policy trade-offs.

Elsewhere, the New Zealand dollar rose 1.2% to $0.584, while the Chinese yuan in onshore trading remained stable as investors assessed new economic data and ongoing trade talks between China and the United States.

Silver prices fell in European trading on Monday, losing more than 4% to extend losses for the fourth consecutive day and recording a four-week low, due to weak investment demand for precious metals, particularly as hopes for global central banks to cut interest rates fade amid rising energy prices.

The worsening losses were limited by a decline in the US dollar against a basket of global currencies amid corrective moves and profit-taking at the start of a busy week of global central bank meetings, especially the Federal Reserve, which is expected to keep interest rates unchanged for the second consecutive meeting.

Price Overview

Silver prices today: silver fell 4.3% to $77.08, the lowest level since February 19, from the session opening level of $80.57, after reaching a high of $81.57.

At Friday’s settlement, silver prices fell 3.9%, marking the third consecutive daily loss.

The white metal silver lost 4.6% last week, marking its second consecutive weekly loss due to the rise in the US dollar amid the repercussions of the Iran war.

Global oil prices

Brent crude continues to rise for the fifth consecutive day, trading above the $100 per barrel level as the US-Israeli war against Iran enters its third week, exposing oil infrastructure to risk and keeping the Strait of Hormuz closed in what represents the largest disruption to global supplies ever.

Higher crude oil prices contribute to accelerating inflation again by raising transportation and production costs, which is expected to force global central banks to seriously consider raising interest rates.

Precious metals are considered a hedge against inflation, but higher interest rates make yield-bearing assets more attractive, reducing the appeal of those metals.

Global central banks

At least eight central banks, including the US Federal Reserve, the European Central Bank, the Bank of England, and the Bank of Japan, will meet this week to determine interest rates in their first policy meetings since the start of the conflict in the Middle East.

Carol Kong, currency strategist at the Commonwealth Bank of Australia, said the war poses downside risks to economic growth and upside risks to inflation, meaning central bank responses will largely depend on the current context, specifically whether inflation is above, within, or below target.

US dollar

The dollar index fell 0.3% on Monday, retreating from a ten-month high of 100.54 points and heading toward its first loss in the past five sessions due to corrective activity and profit-taking.

Beyond profit-taking sales, the US currency weakened at the start of the week against a basket of global currencies as investors continue assessing developments in the Iran war, in addition to awaiting a busy week of monetary policy meetings by major central banks.

US interest rates

Amid rising oil prices, US President Donald Trump again called on Federal Reserve Chair Jerome Powell to cut interest rates.

According to the CME FedWatch tool from CME Group, markets price a 99% probability that US interest rates will remain unchanged this week, while the probability of a 25-basis-point rate cut stands at 1%.

Markets also price a 95% probability that interest rates will remain unchanged at the April meeting, while the probability of a 25-basis-point rate cut stands at 5%.

Federal Reserve

The second monetary policy meeting of the Federal Reserve this year begins tomorrow Tuesday, with decisions scheduled to be announced on Wednesday. Expectations remain stable for interest rates to remain largely unchanged for the second consecutive meeting.

Gold prices fell in European trading on Monday, extending losses for the fourth consecutive day and trading below the historic $5,000 per ounce level, recording a four-week low due to weak investment demand for the metal, particularly as hopes for global central banks to cut interest rates fade amid rising energy prices.

Those losses were limited by a decline in the US dollar against a basket of global currencies amid corrective moves and profit-taking at the start of a busy week of global central bank meetings, especially the Federal Reserve, which is expected to keep interest rates unchanged for the second consecutive meeting.

Price Overview

Gold prices today: gold fell more than 1.0% to $4,967.61, the lowest level since February 19, from the session opening level of $5,019.18, after reaching a high of $5,036.26.

At Friday’s settlement, gold lost 1.2%, marking its third consecutive daily loss due to the strength of the US dollar.

The precious metal gold lost 2.95% last week, marking its second consecutive weekly loss as investors focused on buying the US currency as a preferred safe-haven asset.

Global oil prices

Brent crude continues to rise for the fifth consecutive day, trading above the $100 per barrel level as the US-Israeli war against Iran enters its third week, exposing oil infrastructure to risk and keeping the Strait of Hormuz closed in what represents the largest disruption to global supplies ever.

Higher crude oil prices contribute to accelerating inflation again by raising transportation and production costs, which is expected to force global central banks to seriously consider raising interest rates.

Gold is considered a hedge against inflation, but higher interest rates make yield-bearing assets more attractive, reducing its appeal.

Global central banks

At least eight central banks, including the US Federal Reserve, the European Central Bank, the Bank of England, and the Bank of Japan, will meet this week to determine interest rates in their first policy meetings since the start of the conflict in the Middle East.

Carol Kong, currency strategist at the Commonwealth Bank of Australia, said the war poses downside risks to economic growth and upside risks to inflation, meaning central bank responses will largely depend on the current context, specifically whether inflation is above, within, or below target.

US dollar

The dollar index fell 0.3% on Monday, retreating from a ten-month high of 100.54 points and heading toward its first loss in the past five sessions due to corrective activity and profit-taking.

Beyond profit-taking sales, the US currency weakened at the start of the week against a basket of global currencies as investors continue assessing developments in the Iran war, in addition to awaiting a busy week of monetary policy meetings by major central banks.

US interest rates

Amid rising oil prices, US President Donald Trump again called on Federal Reserve Chair Jerome Powell to cut interest rates.

According to the CME FedWatch tool from CME Group, markets price a 99% probability that US interest rates will remain unchanged this week, while the probability of a 25-basis-point rate cut stands at 1%.

Markets also price a 95% probability that interest rates will remain unchanged at the April meeting, while the probability of a 25-basis-point rate cut stands at 5%.

Federal Reserve

The second monetary policy meeting of the Federal Reserve this year begins tomorrow Tuesday, with decisions scheduled to be announced on Wednesday. Expectations remain stable for interest rates to remain largely unchanged for the second consecutive meeting.

Gold outlook

Christopher Wong, strategist at OCBC Bank, said gold prices remain broadly stable amid market volatility between competing macroeconomic forces. Continued safe-haven demand amid ongoing geopolitical tensions continues to support prices, although rising oil prices have revived inflation concerns.

Wong added that in the near term gold prices may remain volatile as markets reassess Federal Reserve policy and the path of real yields.

SPDR fund

Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, declined on Friday by about 4.29 metric tons, marking the second consecutive daily decline and bringing the total to 1,071.56 metric tons.

The euro rose in European trading on Monday against a basket of global currencies, attempting to recover from a seven-month low against the US dollar, supported by relatively active buying from lower levels.

The US currency retreated from its highest levels in ten months as investors assess developments in the Iran war, ahead of a busy week of global central bank meetings.

The European Central Bank meets later this week and is expected to keep interest rates largely unchanged, while providing further clues about the path of European monetary policy this year.

Price Overview

Euro exchange rate today: the euro rose more than 0.35% against the dollar to $1.1456, from Friday’s closing level of $1.1414, after recording a session low of $1.1419.

The euro ended Friday’s trading down 0.85% against the dollar, marking its fourth consecutive daily loss and recording a seven-month low of $1.1411 due to the escalation of the war in the Middle East.

The euro lost 1.75% against the dollar last week, marking its second consecutive weekly loss due to concerns about the global energy price crisis.

US dollar

The dollar index fell 0.3% on Monday, retreating from a ten-month high of 100.54 points and heading toward its first loss in the past five sessions due to corrective activity and profit-taking.

Beyond profit-taking sales, the US currency weakened at the start of the week against a basket of global currencies as investors continue assessing developments in the Iran war, in addition to awaiting a busy week of monetary policy meetings by major central banks.

At least eight central banks, including the US Federal Reserve, the European Central Bank, the Bank of England, and the Bank of Japan, will meet this week to determine interest rates in their first policy meetings since the start of the conflict in the Middle East.

Carol Kong, currency strategist at the Commonwealth Bank of Australia, said the war poses downside risks to economic growth and upside risks to inflation, meaning central bank responses will largely depend on the current context, specifically whether inflation is above, within, or below target.

European interest rates

Money markets price the probability that the European Central Bank will cut interest rates by 25 basis points at the March meeting at 5%.

Amid rising global energy prices, data from the London Stock Exchange Group (LSEG) suggests the European Central Bank is expected to raise interest rates in June.

European Central Bank

The European Central Bank will meet on Wednesday and Thursday of this week in its second monetary policy meeting of 2026, with markets almost fully expecting European interest rates to remain unchanged, marking the sixth consecutive meeting without any change.

Euro outlook

Jane Foley, head of foreign exchange strategy at Rabobank, said in a note that it has become very clear that shipping through the Strait of Hormuz could be affected for some time.

Foley added that Rabobank has therefore lowered its forecasts for the euro/dollar pair over one and three months to 1.14 and 1.15 respectively, down from $1.16.