The dollar enters this week in a holding pattern. All four major central banks held rates last week and none signalled what comes next. With the Iran conflict now in its fourth week and Brent crude above $108, currency markets are caught between inflation that keeps rates higher for longer and a growth outlook that is quietly deteriorating.
For a full-year view, see our USD forecast 2026 and weekly currency forecast hub.
Key Takeaways
- GBP/USD is at 1.3341, recovering from a March low of 1.3225. Range this week: 1.3250–1.3450.
- GBP/EUR is near 1.16, close to a one-month high. UK CPI on Wednesday is the key catalyst.
- EUR/USD is at 1.1572. Eurozone PMIs Tuesday and Lagarde Wednesday are the primary EUR movers.
- DXY at 99.65 — safe-haven supported but capped by Fed on-hold expectations.
- Brent crude ~$108. Iraq force majeure declared. Goldman warns of a push toward record highs if Hormuz stays blocked.
US Dollar – Will It Go Up This Week?
Probably modestly, but not significantly. The dollar is holding a safe-haven bid from the Iran conflict, but the Dollar Index (DXY) at 99.65 is already pricing in a good deal of that risk. The Federal Reserve held rates at 3.50–3.75% last week and its dot plot signals just one cut in 2026, priced by markets for December at the earliest — which provides yield support but limits further upside.
The main USD events this week are Tuesday’s S&P Global PMI flash estimates and Thursday’s initial jobless claims (forecast: 205,000 vs 216,000 previous). Multiple Fed speakers are also scheduled across the week — Barr Tuesday, Miran Wednesday, then Cook, Jefferson, Logan and Barr again Thursday — any of whom could move USD if they shift the rate narrative.
DXY range: 98.80–101.00
GBP/USD – Pound to Dollar Outlook
Sterling is at 1.3341, up from a March low of 1.3225. The Bank of England held rates at 3.75% last Thursday with a near-unanimous vote and a less dovish tone than February — with UK CPI expected to push toward 3.5% in Q3, the MPC has no reason to rush cuts.
This is a busy week for sterling data. Tuesday brings UK PMI flash estimates. Wednesday delivers UK CPI at 07:00. A hot inflation print reinforces the BoE’s hawkish stance and supports the pound; a soft reading raises cut expectations and would weigh on GBP. Friday closes with UK Retail Sales at 07:00.
GBP/USD range: 1.3250–1.3450
GBP/EUR – Pound to Euro Outlook
GBP/EUR near 1.16 is at the upper end of most Q1 forecasts, driven by the BoE holding at a higher level than the ECB. The ECB held its deposit rate at 2.00% last week but flagged that the war-driven energy spike makes the eurozone outlook “significantly more uncertain” — Europe’s greater energy exposure limits the ECB’s room to act.
Tuesday and Wednesday are the key days. Eurozone PMIs arrive between 08:15–09:00 on Tuesday, followed immediately by UK PMIs at 09:30. On Wednesday, UK CPI at 07:00 is followed by Lagarde at 08:45, creating a two-hour window where both sides of the pair could move sharply.
Use our currency converter to check live GBP/EUR rates, or set a rate alert to be notified when your target is reached.
GBP/EUR range: 1.1540–1.1640
EUR/USD – Euro to Dollar Outlook
EUR/USD at 1.1572 has held up better than many expected given the Iran backdrop. See our euro forecast 2026 for the full-year outlook.
Eurozone PMIs on Tuesday are the first test this week — weak numbers would revive ECB cut expectations and push EUR/USD lower. Lagarde’s speech Wednesday is the bigger event; a dovish signal would likely pull the pair back toward 1.14–1.15, while a holding message keeps it supported near current levels.
EUR/USD range: 1.1480–1.1650
The Iran Conflict: What It Means for FX This Week
The conflict is now in week four and remains the dominant macro driver. Brent spiked near $120 before pulling back to $108 after Netanyahu suggested the war could end sooner than expected. Iraq has declared force majeure at all foreign-operated oilfields. Goldman Sachs has warned Brent could exceed its 2008 record of $147.50 if Hormuz flows remain suppressed for 60 days. The IEA approved an unprecedented 400 million barrel emergency reserve release to buffer markets.
For FX: safe-haven dollar demand persists as long as the conflict does. Any credible ceasefire or Strait reopening news would quickly reduce that dollar premium and push GBP/USD and EUR/USD higher. Sterling outperforms the euro in a sustained high-oil environment due to the UK’s partial energy insulation and the BoE’s more hawkish stance.
Rate Summary
| Pair | Current | Range This Week | Trend |
|---|---|---|---|
| GBP/USD | 1.3341 | 1.3250–1.3450 | Recovering from March low |
| GBP/EUR | ~1.1580 | 1.1540–1.1640 | Near one-month high |
| EUR/USD | 1.1572 | 1.1480–1.1650 | Holding above mid-March lows |
| DXY | 99.65 | 98.80–101.00 | Iran bid intact; off March peak |
| Brent | ~$108/bbl | — | Elevated; off $119 spike |
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