[MARKET ANALYSIS] Dollar holds on to recent spoils amid haven appeal

DXY: +0.1%

• Held on to recent spoils amid the ever-escalating Middle Eastern conflict, which continues to expand across the region, with Axios sources stating that the UAE is considering taking military action to stop Iranian missile and drone strikes on the country, while an Israeli senior official estimates that Saudi Arabia will attack Iran soon. Elsewhere, the data calendar for the US is very light, although ISM Services is scheduled later, while there were recent Fed speakers, in which the main message was that policy was well-positioned, and it is too soon to gauge the impact of the war in Iran on inflation.

EUR/USD: -0.1%

• Remains lacklustre and just about slipped back beneath the 1.1600 handle, but with price action rangebound as EU PPI and Unemployment data releases loom.

GBP/USD: -0.2%

• Demand is subdued but with the pair off intraday lows with some support seen at the 1.3300 level, and following a lack of fireworks from the recent UK Spring Statement, with the OBR downgrading its 2026 growth and inflation view.

USD/JPY: Flat

• Price action is little changed amid a quiet calendar for Japan and amid ongoing uncertainty regarding the Iranian conflict and effects on inflation, as well as the ramifications for BoJ monetary policy.

Antipodeans: AUD/USD -0.4% / NZD/USD +0.1%

• Antipodeans are mixed with AUD/USD underperforming despite the better-than-expected Australian GDP data for Q4, which topped forecasts, although the currency failed to benefit amid the downbeat risk appetite and given that the data was prior to the central bank's first rate hike in more than two years.