The Global FX Outlook – March 2026

March begins with global currency markets balancing a tight U.S. dollar trading range against a clear rise in headline risk. The dollar is holding relatively steady as markets debate the timing of Federal Reserve cuts, but military strikes in Iran are adding a safe-haven layer that can keep USD demand elevated, particularly during periods of risk aversion. At the same time, higher oil prices are back in focus, with WTI around US$74.00, supporting energy exporters like Canada while increasing volatility risk across major pairs.

Outside the U.S., policy divergence and relative economic momentum remain the main drivers of FX. The euro is expected to stay range-bound, with the Eurozone-U.S. two-year differential supportive of a 1.1650 to 1.1850 range in EUR/USD as markets price further Fed cuts but no near-term change from the ECB. In the UK, a higher unemployment rate and lower inflation have pushed rate-cut pricing back into focus, with markets pricing a 72% chance of a Bank of England cut on March 19, a setup that may keep GBP under pressure. In Asia-Pacific, AUD has strengthened further after the RBA lifted rates to 3.85% for the first time this cycle, while the RBNZ is signalling patience, leaving NZD more range-bound. Meanwhile, JPY remains sensitive to domestic fiscal and policy expectations, and CNY strength has continued amid a “strong yuan” policy backdrop and a trade surplus near 4.0% of GDP, with more than half of Chinese trade now denominated in CNY.

The March 2026 Currency Outlook explores how a range-trading but headline-sensitive USD, oil-driven support for commodity-linked currencies, and widening central bank divergence are shaping global currency markets as 2026 unfolds.

What you will learn in this report:  

• Market analysis: Why the USD is holding a tight range despite Fed cut pricing, how geopolitical risk is reinforcing safe-haven demand, and why oil prices are reasserting influence across major currencies, especially CAD and other commodity-linked FX.
• Currency projections: Updated 1–3 month views across USD, EUR, GBP, CAD, JPY, CNY, AUD, NZD, and MXN, including key pairs such as EUR/USD, GBP/USD, USD/CAD, USD/JPY, AUD/USD, NZD/USD, USD/CNY, and USD/MXN.
• Risks to watch: Fed cuts later in 2026, EUR/USD spending more time above 1.2000 in late 2026 if USD softens while the ECB holds steady, GBP sensitivity to shifting UK policy expectations, AUD upside if the RBA delivers a series of rate increases, NZD outperformance on late-2026 RBNZ hikes, renewed USD/JPY volatility tied to Japanese rate moves and debt-servicing concerns, and volatility spikes in CAD and MXN as USMCA trade negotiations begin in earnest.