Good morning,
Last week was straightforward to read if you've been watching currency markets for any length of time.
Middle East tensions escalated. Oil pushed above $100. Geopolitical risk spiked. And money moved straight into the US dollar — the same trade that has worked for 50 years.
The USD index pushed toward 100. Equities sold off. Every major currency pair felt the pressure.
Textbook risk-off.
Here's where each major pair sits heading into this week.
USD Index - Back above 100 - Strong USD signal.
AUD/USD — 0.6851
The Aussie is caught between two forces right now. The RBA hiked 0.25% as expected and markets are pricing another hike. That's AUD-positive. But USD strength on the back of geopolitical risk is the more powerful force at the moment.
Support is sitting around 0.6850. If that breaks, 0.6800 becomes the next level to watch. The mining sector is benefiting from higher commodity prices but it hasn't translated into currency strength yet.
Watch the Middle East. Any de-escalation and AUD bounces fast.
GBP/USD — 1.3253
Sterling is holding up better than most. The Bank of England stayed hawkish and walked back early 2026 rate cut expectations — oil price spikes made that easy. GBP has a cleaner domestic story than EUR right now which is why it's outperforming.
If risk appetite returns, GBP is one of the pairs most likely to rally hard.
USD/JPY — 159.91
The yen is sitting right at the level where intervention chatter starts. 160 is the line markets are watching — at that point the Bank of Japan and Ministry of Finance tend to get uncomfortable. One hawkish member pushed for a 0.25% hike at the last meeting but it wasn't enough to offset USD safe-haven flows.
This is a pair worth watching closely this week.
EUR/USD — 1.1509
The euro is struggling. Europe imports commodities so oil price spikes hit European sentiment harder than US markets. The ECB is staying hawkish but it isn't enough to counter the broader USD bid. EUR/USD is now sitting below its 200-day moving average. The 1.1500 level is the critical support to watch.
NZD/USD — 0.5730
The kiwi is following the Aussie lower. No specific RBNZ catalyst — just the broader risk-off environment hitting commodity currencies. Without a clear China recovery story, NZD stays under pressure. 0.5700 is the floor to watch.
What's driving markets this week
Three things to keep an eye on.
Oil above $100 keeps inflation elevated globally which reduces the likelihood of rate cuts almost everywhere. That keeps central banks in a difficult position.
Any escalation in the Middle East pushes more capital into USD. Any de-escalation could trigger a sharp reversal just as quickly.
Central bank divergence is widening. The Fed stays hawkish on inflation risk. The RBA is hiking. The ECB is caught between energy-driven inflation and slowing growth.
What this means if you're an athlete or client
A 2-3% move in a week is not unusual in an environment like this. On a $1M contract that's $20,000 to $30,000 in real purchasing power — gone, without anyone making a mistake or a bad decision.
This is exactly why we hedge. Not to predict the market. To remove the exposure before the shock arrives.
If you have transfers coming or contracts denominated in foreign currencies, the next few weeks are worth paying attention to.
Chris Broadfoot,
Founder SportsFX, Currency Consultancy for Global Athletes.