Market sentiment remains unclear and mostly cautious early Wednesday. Mixed headlines from the Strait of Hormuz and anxiety ahead of the U.S. inflation data, the Consumer Price Index (CPI) for February, keep traders cautious. Markets are also watching preparations for the Group of Seven (G7) meeting and the global reaction to the Iran war, adding to the uncertain mood.
The confusion began when U.S. Energy Secretary Chris Wright posted on Twitter that the U.S. Navy had successfully escorted a tanker through the Strait of Hormuz. Around 25 minutes later, after the news had already spread across major news wires, he deleted the post. This caused crude oil prices to drop quickly to $77 before rebounding to $81. The White House later confirmed that no ship had actually been escorted.
At the same time, CBS reported that naval mines were being prepared, and shortly after, CNN sources said “a few dozen” mines had been deployed. This pushed oil prices to session highs in the US. However, U.S. President Donald Trump later said there was no intelligence confirming such a deployment. He added that if mines had been placed, Iran should remove them, calling it a “giant step” toward peace.
Separately, U.S. President Donald Trump announced a major oil refinery project in Brownsville, Texas. In a post on Truth Social, he said the America First Refining project would be the first new oil refinery built in the US in about 50 years, marking an important milestone for the energy sector. The project aims to fuel U.S. markets, strengthen national security, boost American energy production, deliver billions of dollars in economic impact, and become the cleanest refinery in the world. Trump also thanked Reliance Industries Limited (RIL), one of the world’s largest private energy companies from India, for its role in the project and called it an important step in strengthening economic ties between the US and India.
Leaders of the Group of Seven (G7) nations will hold a video meeting on Wednesday to discuss the impact of rising Middle East tensions on global energy markets and possible coordinated actions to stabilise oil prices. Canadian Prime Minister Mark Carney said one option could be the coordinated use of G7 strategic petroleum reserves to ease price pressure, while emphasising that reducing tensions and achieving peace remains the best solution.
Regarding U.S. economic data, the National Federation of Independent Business (NFIB) Business Optimism Index fell to a three-month low of 98.8 in February. Meanwhile, the Automatic Data Processing (ADP) Employment Change showed an eight-week high in its weekly reading, and Existing Home Sales for February also came in stronger than forecasts. These mostly positive data supported the rise of the U.S. Dollar (USD) on Tuesday during risk-aversion, although the currency later eased slightly ahead of the CPI release.
In Japan, wholesale prices rose 2.0% year-on-year (y/y) in February, slightly below the expected 2.1%.
In currency and commodity markets, the U.S. Dollar Index (DXY) reversed the previous day’s gains and moved slightly lower. EURUSD recovered after the prior pullback, GBPUSD also rebounded, and USDJPY stayed relatively firm. AUDUSD climbed to its highest level since June 2022, NZDUSD moved slightly higher, and USDCAD remained under pressure.
Elsewhere, crude oil dropped about 3.0%, cryptocurrencies ended their two-day winning streak, and Asia-Pacific equity markets moved lower, following Tuesday’s mixed performance on Wall Street.
EURUSD is gaining bids early Wednesday, reversing Tuesday’s pullback from a one-week high and extending the rebound that started at the beginning of the week from the lowest level since November 2025. The move is mainly supported by a softer U.S. Dollar (USD) and hawkish comments from European Central Bank (ECB) President Christine Lagarde, while the pair largely ignores mostly positive U.S. data and mixed European Union (EU) statistics. Market positioning ahead of Germany’s inflation data and the U.S. Consumer Price Index (CPI), along with scheduled speeches from several ECB and Federal Reserve (Fed) officials, is also supporting the Euro’s recovery.
ECB President Christine Lagarde said the eurozone economy is not facing a stagflation environment, but policymakers remain cautious due to uncertainty surrounding the interest rate outlook. Speaking before the European Parliament’s Economic and Monetary Affairs Committee (ECON), she noted that the eurozone now has a stronger capacity to absorb economic shocks compared to the 2022 energy crisis, although the global economic environment remains highly uncertain and limits clear policy guidance.
GBPUSD also records modest gains early Wednesday and is on track for weekly gains, supported mainly by the softer U.S. Dollar (USD). Meanwhile, USDJPY moves slightly higher and maintains the rebound seen in the previous session.
While the weaker USD supports GBPUSD, the rise in USDJPY appears less justified despite the hawkish bias of the Bank of Japan (BoJ) (Bank of Japan), the Japanese Yen’s (JPY) traditional safe-haven status, and mostly positive economic data from Japan. The pair’s strength may be linked to concerns about heavy fiscal stimulus in Japan and the potential challenges the BoJ could face in raising interest rates under a strong Prime Minister (PM) leadership.
AUDUSD climbed to its highest level since June 2022, extending its four-day uptrend. The rise is mainly supported by hawkish comments from a Reserve Bank of Australia (RBA) (Reserve Bank of Australia) official and a softer U.S. Dollar (USD). Cautious optimism about China, Australia’s key trading partner, also supports the pair’s strength. This positive mood also helps NZDUSD remain firm.
Meanwhile, USDCAD falls for the second consecutive day despite weaker crude oil prices, which are important for Canada as a key export commodity. The pair remains pressured mainly due to the softer USD and market consolidation ahead of the U.S. Consumer Price Index (CPI) release and Canada’s Employment data scheduled for Friday.
Andrew Hauser, Deputy Governor of the Reserve Bank of Australia (RBA) (Reserve Bank of Australia), warned that rising oil price risks could intensify the debate about future interest rate increases. He is scheduled to speak live on March 17.
Oil is currently driving market movements, and the situation turned messy during Tuesday’s North American trading session. Crude oil prices were steadily falling toward $80, helping calm markets, but miscommunication, leaks, and later denials caused sharp swings. Early Wednesday, black gold moved lower again as markets expect large oil reserve releases from the International Energy Agency (IEA) (International Energy Agency) and possible efforts by the Group of Seven (G7) to ease geopolitical tensions.
Market uncertainty also rises due to mixed messages from U.S. President Donald Trump about Iran and Tehran’s refusal to back down. This caution, together with positioning before the U.S. Consumer Price Index (CPI), helps gold remain firm, especially with a softer U.S. Dollar (USD).
Cryptocurrencies struggle to extend their two-day rebound, as Bitcoin (BTC) (Bitcoin) and Ethereum (ETH) (Ethereum) post mild losses despite the softer USD.
In equity markets, major U.S. stock indices closed mixed. The NASDAQ Composite Index (NASDAQ) rose 0.01%, while the Standard and Poor’s 500 Index (S&P 500) fell 0.21% and the Dow Jones Industrial Average (DJIA) slipped 0.07%. The Russell 2000 Index declined 0.22%, showing a cautious broader market tone.
In corporate news, Oracle Corporation (Oracle) reported stronger-than-expected fiscal third-quarter results. Adjusted revenue came in at $17.19 billion versus the expected $16.89 billion, the adjusted operating margin reached 43% compared with the expected 42.7%, and adjusted operating income rose to $7.38 billion, above the forecast $7.21 billion.
German inflation data and statements from European Central Bank (ECB) (European Central Bank) and Federal Reserve (Fed) (Federal Reserve) officials will draw attention on Wednesday, but the main focus will remain on the U.S. Consumer Price Index (CPI) for February and news around the Iran war. Traders will also watch weekly U.S. crude oil inventories from the Energy Information Administration (EIA) (Energy Information Administration), updates from the Group of Seven (G7) meeting, and reports about a likely record oil reserve release by the International Energy Agency (IEA) (International Energy Agency) to curb rising oil prices.
With the U.S. Dollar (USD) struggling to stay strong amid mixed sentiment, softer U.S. inflation data could push the greenback lower, supporting EURUSD and other major currencies in their recent recovery. However, any unexpected rise in global risk could trigger a pullback in AUDUSD, which is trading at a 45-month high.
May the trading luck be with you!
