Safe Havens Rise as Iran Tensions Shake Global Markets

Financial markets have experienced heightened volatility over the past 10 days following the escalation of conflict involving Iran, as investors react to rising geopolitical risk and energy price uncertainty

Publish Date

March 9, 2026

The Market Report- 08/03/2026

Financial markets have experienced heightened volatility over the past 10 days following the escalation of conflict involving Iran, as investors react to rising geopolitical risk and energy price uncertainty

Pound

While sterling has not attracted safe haven flows during the conflict, it has still managed to outperform the euro over the past week. Previously expected Bank of England rate cuts now appear less likely as rising energy prices, driven by the war, are expected to push inflation higher.

Euro

By the end of trading on Friday, the euro had weakened slightly against the pound as investors assessed differing economic outlooks for the UK and the eurozone. Recent GDP data showed modest eurozone growth below expectations. Despite easing inflation and lower interest rates, the economy still faces challenges, including potential US trade tariffs and its heavy reliance on energy imports, leaving it vulnerable to rising energy prices.

US Dollar

Markets have been primarily driven by the ongoing conflict in Iran, which has been the dominant market-moving factor this week and is likely to remain so. President Trump stated that attacks will continue until US objectives are met, prompting a strong response from Iran, including restrictions on commercial shipping through the Strait of Hormuz - pushing oil prices higher and increasing global inflation pressures.

Despite weak US labour data showing a loss of 92K jobs in February, compared with expectations for a 52K increase, and unemployment rising to 4.4%, ongoing geopolitical tensions continued to drive safe-haven demand for the US dollar, strengthening the currency. Shown by the Pound hitting a three-month low against the dollar, it did have a modest rebound, however.

What’s coming up this week?

Pound

Thursday BoE’s Governor Bailey Speech.

Euro

Wednesday- ECB’s Schnabel speech, Industrial production data realised Friday 13th

US Dollar

Wednesday- USD consumer price index, GDP figures released on Friday 13th.

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