Energy Shock Reshapes 2026 Currency Markets: Dollar, Yen, and Sterling in Focus

2026 Forex Forecast

Energy shock reshapes major currency outlooks

Dollar gains on energy supply pressure

Yen weakness triggers intervention speculation

Stock video by Natures_Embrace via Pixabay

Mar 18, 2026

Energy Shock Reshapes 2026 Currency Markets: Dollar, Yen, and Sterling in Focus

According to Hellenic Shipping News, the dollar is receiving significant positive pressure from an ongoing energy supply shock. The situation is not viewed as a repeat of a previous major decline in the EUR/USD pair, as the Federal Reserve is not expected to initiate an aggressive tightening cycle comparable to that period. The European Central Bank is seen as more likely than the Fed to raise interest rates if elevated energy prices persist.

Analysts suspect the EUR/USD pair could find support above a specific threshold and tentatively forecast a rise to a higher range by the end of the year, contingent on the Fed restarting its policy easing. A restart of oil flows from the Gulf is identified as a necessary condition to establish a floor for the currency pair.

Yen Weakness Prompts Intervention Speculation

The energy shock has impacted the yen significantly. Higher energy costs combined with a weaker currency could challenge government plans to manage living costs. Official verbal support against yen depreciation is pronounced, and near a key level the market is considered to be in territory where foreign exchange intervention is plausible, referencing substantial sales conducted around similar levels in 2024.

The potential for coordinated intervention with Washington is questioned, with unilateral action seen as more likely. Such action might correct the USD/JPY pair to a lower range but could be quickly reversed. A sustained reversal for the yen is deemed to require lower energy prices, Federal Reserve rate cuts, and Bank of Japan rate hikes.

Bank of England Rate Expectations Shift

Sterling has slightly outperformed other European currencies despite the energy shock, largely due to a complete reassessment of the Bank of England's policy path. Market expectations have shifted from anticipating rate cuts to pricing in a modest amount of hikes, as the central bank is perceived as highly reactive to inflation. Some policymakers believe inflation was never fully controlled.

However, a looser labour market and tighter fiscal policy compared to 2022 are seen as reducing the risk of secondary inflation effects. Provided the energy shock does not extend for three months or longer, the GBP/USD pair is expected to find support in the low 1.30s.

Other Currency Pair Dynamics

The EUR/JPY pair's relative stability is noted, reflecting that both the euro and yen have been similarly affected by the energy shock. Pressure for a decline could build if energy prices remain high, with the euro seen as more vulnerable to dropping against the dollar than the yen is to rallying, given official interest in capping USD/JPY near a specific level. Both the eurozone and Japanese money markets are pricing in a similar amount of rate hikes, with the Bank of Japan considered more likely to deliver.

The recent correction lower in EUR/GBP is attributed to the aggressive repricing of the Bank of England cycle and large short positions in sterling. Analysts doubt this repricing has much further to run and expect support near a certain level, with potential rate cuts later in the year seen pushing the pair higher. Sterling also faces potential challenges from Gilt yields approaching a level that previously pressured the currency and from domestic political threats.

The Swiss National Bank is reportedly increasingly prepared to intervene in foreign exchange markets, citing the strength of the trade-weighted franc. Previous intervention periods involved purchases of a specific amount of foreign currency, which did not firmly establish a floor for EUR/CHF, but the central bank may now be buying below a certain level. A sustained correction higher would require clearer signs of eurozone growth.

The Swedish krona has underperformed within the G10 since the start of a conflict, partly due to prior positioning. However, EUR/SEK movement has been contained, reflecting lingering appetite for the krona and continued capital repatriation to Sweden. Market pricing anticipates rate hikes by the ECB and Riksbank, but one analysis maintains a forecast for unchanged rates.

Forecasts for EUR/NOK have been revised lower due to a new baseline for higher oil prices. A de-escalation could trigger upward adjustments, but a specific level is now seen as a ceiling. The Norwegian krone curve prices in some tightening by year-end, but a chance of easing in the second half of 2026 remains, especially after recent inflation data.

The Danish krone faces upward pressure against the euro due to poor liquidity and supportive rate differentials. The central bank did not intervene in February, but current levels are consistent with pre-pandemic intervention to support the krone. The recent energy price shock might make a rate hike in Denmark a more digestible policy tool to address currency strength.

The Canadian dollar is in a strong position due to its positive exposure to energy prices and geopolitical distance from a conflict, though equity market weakness is a vulnerability. The Canadian swap curve has undergone hawkish repricing, but analysts disagree with market pricing for a rate hike by year-end, citing uncertainty around upcoming trade agreement renegotiations. A sustainable break below a specific level in USD/CAD is seen as a story for the second half of the year.

Markets are pricing in a high probability of a rate hike by the Reserve Bank of Australia at its March meeting, which has become a consensus view. Some analysts are not convinced, arguing uncertainty favors inaction, making it a close call. They maintain a call for a hike in May, suggesting any dovish surprise in March may only cause short-term AUD weakness. Positioning is seen as stretched, and equity instability could dampen enthusiasm, though the medium-term outlook remains strong.

The New Zealand dollar has diverged from the Australian dollar, reflecting New Zealand's status as a net energy importer, meaning it bears the negatives of risk instability without a commodity upside. Monetary policy is also a factor, as the Reserve Bank of New Zealand's recent dovish hold has made markets more cautious in pricing hikes. The upcoming April meeting is viewed as crucial, with upside risks for NZD if high energy prices through March prompt a more hawkish stance.

1. INTRODUCTION

Making Data-Driven Decisions to Grow Your Business
1. REPORT DESCRIPTION
2. RESEARCH METHODOLOGY AND THE AI PLATFORM
3. DATA-DRIVEN DECISIONS FOR YOUR BUSINESS
4. GLOSSARY AND SPECIFIC TERMS
2. EXECUTIVE SUMMARY

A Quick Overview of Market Performance
1. KEY FINDINGS
2. MARKET TRENDS This Chapter is Available Only for the Professional EditionPRO
3. MARKET OVERVIEW

Understanding the Current State of The Market and its Prospects
1. MARKET SIZE: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
2. CONSUMPTION BY COUNTRY: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
3. MARKET FORECAST TO 2035
4. MOST PROMISING PRODUCTS FOR DIVERSIFICATION

Finding New Products to Diversify Your Business
- This Chapter is Available Only for the Professional EditionPRO
1. TOP PRODUCTS TO DIVERSIFY YOUR BUSINESS
2. BEST-SELLING PRODUCTS
3. MOST CONSUMED PRODUCTS
4. MOST TRADED PRODUCTS
5. MOST PROFITABLE PRODUCTS FOR EXPORT
5. MOST PROMISING SUPPLYING COUNTRIES

Choosing the Best Countries to Establish Your Sustainable Supply Chain
- This Chapter is Available Only for the Professional EditionPRO
1. TOP COUNTRIES TO SOURCE YOUR PRODUCT
2. TOP PRODUCING COUNTRIES
3. TOP EXPORTING COUNTRIES
4. LOW-COST EXPORTING COUNTRIES
6. MOST PROMISING OVERSEAS MARKETS

Choosing the Best Countries to Boost Your Export
- This Chapter is Available Only for the Professional EditionPRO
1. TOP OVERSEAS MARKETS FOR EXPORTING YOUR PRODUCT
2. TOP CONSUMING MARKETS
3. UNSATURATED MARKETS
4. TOP IMPORTING MARKETS
5. MOST PROFITABLE MARKETS
7. PRODUCTION

The Latest Trends and Insights into The Industry
1. PRODUCTION VOLUME AND VALUE: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
2. PRODUCTION BY COUNTRY: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
8. IMPORTS

The Largest Import Supplying Countries
1. IMPORTS: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
2. IMPORTS BY COUNTRY: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
3. IMPORT PRICES BY COUNTRY: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
9. EXPORTS

The Largest Destinations for Exports
1. EXPORTS: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
2. EXPORTS BY COUNTRY: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
3. EXPORT PRICES BY COUNTRY: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
10. PROFILES OF MAJOR PRODUCERS

The Largest Producers on The Market and Their Profiles
- This Chapter is Available Only for the Professional EditionPRO
11. COUNTRY PROFILES

The Largest Markets And Their Profiles
This Chapter is Available Only for the Professional Edition PRO
1. 11.1
  United States
  - Market Size
  - Production
  - Imports
  - Exports
2. 11.2
  China
  - Market Size
  - Production
  - Imports
  - Exports
3. 11.3
  Japan
  - Market Size
  - Production
  - Imports
  - Exports
4. 11.4
  Germany
  - Market Size
  - Production
  - Imports
  - Exports
5. 11.5
  United Kingdom
  - Market Size
  - Production
  - Imports
  - Exports
6. 11.6
  France
  - Market Size
  - Production
  - Imports
  - Exports
7. 11.7
  Brazil
  - Market Size
  - Production
  - Imports
  - Exports
8. 11.8
  Italy
  - Market Size
  - Production
  - Imports
  - Exports
9. 11.9
  Russian Federation
  - Market Size
  - Production
  - Imports
  - Exports
10. 11.10
  India
  - Market Size
  - Production
  - Imports
  - Exports
11. 11.11
  Canada
  - Market Size
  - Production
  - Imports
  - Exports
12. 11.12
  Australia
  - Market Size
  - Production
  - Imports
  - Exports
13. 11.13
  Republic of Korea
  - Market Size
  - Production
  - Imports
  - Exports
14. 11.14
  Spain
  - Market Size
  - Production
  - Imports
  - Exports
15. 11.15
  Mexico
  - Market Size
  - Production
  - Imports
  - Exports
16. 11.16
  Indonesia
  - Market Size
  - Production
  - Imports
  - Exports
17. 11.17
  Netherlands
  - Market Size
  - Production
  - Imports
  - Exports
18. 11.18
  Turkey
  - Market Size
  - Production
  - Imports
  - Exports
19. 11.19
  Saudi Arabia
  - Market Size
  - Production
  - Imports
  - Exports
20. 11.20
  Switzerland
  - Market Size
  - Production
  - Imports
  - Exports
21. 11.21
  Sweden
  - Market Size
  - Production
  - Imports
  - Exports
22. 11.22
  Nigeria
  - Market Size
  - Production
  - Imports
  - Exports
23. 11.23
  Poland
  - Market Size
  - Production
  - Imports
  - Exports
24. 11.24
  Belgium
  - Market Size
  - Production
  - Imports
  - Exports
25. 11.25
  Argentina
  - Market Size
  - Production
  - Imports
  - Exports
26. 11.26
  Norway
  - Market Size
  - Production
  - Imports
  - Exports
27. 11.27
  Austria
  - Market Size
  - Production
  - Imports
  - Exports
28. 11.28
  Thailand
  - Market Size
  - Production
  - Imports
  - Exports
29. 11.29
  United Arab Emirates
  - Market Size
  - Production
  - Imports
  - Exports
30. 11.30
  Colombia
  - Market Size
  - Production
  - Imports
  - Exports
31. 11.31
  Denmark
  - Market Size
  - Production
  - Imports
  - Exports
32. 11.32
  South Africa
  - Market Size
  - Production
  - Imports
  - Exports
33. 11.33
  Malaysia
  - Market Size
  - Production
  - Imports
  - Exports
34. 11.34
  Israel
  - Market Size
  - Production
  - Imports
  - Exports
35. 11.35
  Singapore
  - Market Size
  - Production
  - Imports
  - Exports
36. 11.36
  Egypt
  - Market Size
  - Production
  - Imports
  - Exports
37. 11.37
  Philippines
  - Market Size
  - Production
  - Imports
  - Exports
38. 11.38
  Finland
  - Market Size
  - Production
  - Imports
  - Exports
39. 11.39
  Chile
  - Market Size
  - Production
  - Imports
  - Exports
40. 11.40
  Ireland
  - Market Size
  - Production
  - Imports
  - Exports
41. 11.41
  Pakistan
  - Market Size
  - Production
  - Imports
  - Exports
42. 11.42
  Greece
  - Market Size
  - Production
  - Imports
  - Exports
43. 11.43
  Portugal
  - Market Size
  - Production
  - Imports
  - Exports
44. 11.44
  Kazakhstan
  - Market Size
  - Production
  - Imports
  - Exports
45. 11.45
  Algeria
  - Market Size
  - Production
  - Imports
  - Exports
46. 11.46
  Czech Republic
  - Market Size
  - Production
  - Imports
  - Exports
47. 11.47
  Qatar
  - Market Size
  - Production
  - Imports
  - Exports
48. 11.48
  Peru
  - Market Size
  - Production
  - Imports
  - Exports
49. 11.49
  Romania
  - Market Size
  - Production
  - Imports
  - Exports
50. 11.50
  Vietnam
  - Market Size
  - Production
  - Imports
  - Exports
LIST OF TABLES
1. Key Findings In 2025
2. Market Volume, In Physical Terms: Historical Data (2012–2025) and Forecast (2026–2035)
3. Market Value: Historical Data (2012–2025) and Forecast (2026–2035)
4. Per Capita Consumption, by Country, 2022–2025
5. Production, In Physical Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
6. Imports, In Physical Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
7. Imports, In Value Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
8. Import Prices, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
9. Exports, In Physical Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
10. Exports, In Value Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
11. Export Prices, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
LIST OF FIGURES
1. Market Volume, In Physical Terms: Historical Data (2012–2025) and Forecast (2026–2035)
2. Market Value: Historical Data (2012–2025) and Forecast (2026–2035)
3. Consumption, by Country, 2025
4. Market Volume Forecast to 2035
5. Market Value Forecast to 2035
6. Market Size and Growth, By Product
7. Average Per Capita Consumption, By Product
8. Exports and Growth, By Product
9. Export Prices and Growth, By Product
10. Production Volume and Growth
11. Exports and Growth
12. Export Prices and Growth
13. Market Size and Growth
14. Per Capita Consumption
15. Imports and Growth
16. Import Prices
17. Production, In Physical Terms: Historical Data (2012–2025) and Forecast (2026–2035)
18. Production, In Value Terms: Historical Data (2012–2025) and Forecast (2026–2035)
19. Production, by Country, 2025
20. Production, In Physical Terms, by Country: Historical Data (2012–2025) and Forecast (2026–2035)
21. Imports, In Physical Terms: Historical Data (2012–2025) and Forecast (2026–2035)
22. Imports, In Value Terms: Historical Data (2012–2025) and Forecast (2026–2035)
23. Imports, In Physical Terms, By Country, 2025
24. Imports, In Physical Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
25. Imports, In Value Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
26. Import Prices, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
27. Exports, In Physical Terms: Historical Data (2012–2025) and Forecast (2026–2035)
28. Exports, In Value Terms: Historical Data (2012–2025) and Forecast (2026–2035)
29. Exports, In Physical Terms, By Country, 2025
30. Exports, In Physical Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
31. Exports, In Value Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
32. Export Prices, By Country: Historical Data (2012–2025) and Forecast (2026–2035)

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