Foreign Exchange Market Update

March 2, 2026

U.S. Dollar Rises on Escalating Geopolitical Tensions

The U.S. dollar strengthened against other major currencies in the European session on Monday amid escalating tensions in West Asia. The conflict in the region escalated further today after Israel launched airstrikes on Hezbollah targets in Beirut and other parts of Lebanon following projectile fire from Lebanese territory into northern Israel.

U.S. President Donald Trump suggested the conflict with Iran could go on for the next four weeks, raising concerns about a significant widening of hostilities in the region. All eyes are on the status of the Strait of Hormuz, which is crucial for the flow of oil to the rest of the world. Elsewhere, tensions between Afghanistan and Pakistan have sharply escalated after Afghan Air Force attacked key Pakistani military installations, including the Nur Khan Airbase in Rawalpindi, in response to the recent aerial incursions by the Pakistani military.

The U.S. Labor Department's monthly jobs report, along with other reports on retail sales, manufacturing, and service sector activity, will be in the spotlight this week amid considerable uncertainties over U.S. tariffs and Fed policy.

In European trading today, the U.S. dollar rose to nearly a 1-1/2-month high of 1.1698 against the euro, nearly a 2-1/2-month high of 1.3314 against the pound, and a 3-week high of 157.25 against the yen, from yesterday's closing quotes of 1.1796, 1.3456, and 156.16.

Against the Swiss franc, the U.S. dollar edged up to 0.7743 from an early low of 0.7679. Against the Australian dollar, the U.S. dollar climbed to 1.7045 from an early low of 0.7117. The U.S. dollar had traded earlier to a 6-day high of 0.7036 against the Australian dollar.

Against the New Zealand and the Canadian dollars, the U.S. dollar advanced to more than a 1-month high of 0.5928 and a 4-day high of 1.3687 from early lows of 0.5997 and 1.3641. 03/02/2026 - 05:22:00 (RTTNews)

Eurozone Manufacturing Growth Strongest in Nearly 4 Years

Euro traded at 1.1683 against USD at 9:00 AM PST

The euro area manufacturing activity registered its strongest growth in almost four years in February, underpinned by a renewed increase in new orders and production.

Factory output increased in February, accompanied by a rise in new orders. Meanwhile, employment continued to fall across the currency bloc. Regarding inflationary pressures, input costs increased at the fastest pace in 38 months; output charges registered a back-to-back monthly increase for only the second time in almost three years.

Among the big four economies, Germany returned to growth for the first time in over three-and-a-half years. Growth in the French manufacturing sector moderated from January's 43-month high. The final factory purchasing managers index (PMI) dropped to 50.1 in February from 51.2 the previous month.

The Italian manufacturing activity pulled out of contraction in February, partly due to renewed growth in production and orders. The factory PMI climbed to 50.6 from 48.1 in January. Following two successive months of contraction, Spanish manufacturing conditions showed a degree of stability in February. The PMI rose to 50.0 in February from a nine-month low of 49.2 in January. 03/02/2026 - 07:36:00 (RTTNews)