Related insights
- Research Library04 Mar 2026
- GDP Nowcast: India’s GDP growth likely to moderate in 1Q 04 Mar 2026
- ASEAN-6 markets: Degrees of impact on Middle East risks 04 Mar 2026
The aggressive flight to safety into the USD is beginning to look overstretched following a significant 2% surge in the DXY Index over the past two sessions. After testing a high of 99.7 yesterday, the greenback encountered stiff technical resistance near the psychological 100 level, prompting investors to dial back their long positions as the initial shock of the Iran strikes began to digest. A primary catalyst for the cooling market sentiment was Washington’s decision to militarize and subsidize the transit of the Strait of Hormuz by providing insurance backed by the US International Development Finance Corporation (DFC) and naval convoys to bypass the skyrocketing costs of private maritime cover. Further easing supply-side anxieties, India’s oil ministry issued a statement emphasizing that the heavily oil-reliant nation maintains ample crude and fuel inventories to buffer against any short-term supply disruption. South Korea’s announcements to address oil supply concerns and measures to stabilize its markets should also help to dampen the "panic premium" in energy markets. Consequently, Brent crude retreated to USD81.40/barrel, falling below Monday’s peak after a brief Tuesday spike to 85.
Adding to this stabilizing backdrop was a decisive move from Beijing. The People’s Bank of China (PBOC) signalled its intent to anchor regional stability by setting a surprisingly stronger-than-expected daily fixing for USD/CNY. On Tuesday, the PBOC lowered the daily fixing by 148 pips to 6.9088, its largest adjustment in over six months. The move complemented Monday’s decision to slash the FX risk reserve requirement ratio for forward forex sales to 0% from 20%, indicating that China was no longer worried about capital outflows and a weak CNY. As the National People’s Congress convenes today, all eyes are on the unveiling of the 15th Five-Year Plan (2026–2030), which will likely include President Xi Jinping’s pivot for the CNY to become a global reserve currency.
The US confirmed that President Trump’s scheduled trip to China is proceeding as planned, despite the military engagement in the Middle East. This announcement served as a vital "de-escalation" signal for markets, suggesting that the administration is committed to maintaining its broader geopolitical and trade agenda with Beijing rather than being pulled into a multi-front diplomatic crisis. 
Despite the recent volatility, the DXY Index remains remarkably consistent with its long-term behaviour. Looking at the broader technical picture since mid-2025, the DXY has kept to a steady trading range between 96 and 100.4. This range has held firm despite a series of significant global events, including the French budget deadlock crisis, Japan’s Sanaenomics and snap election, and the US Supreme Court striking down Trump’s tariffs under IEEPA. Meanwhile, pay attention to the US Senate’s vote on a War Powers Resolution to limit President Trump’s authority to conduct further military actions against Iran. Although it will likely pass with a simple majority, it lacks the two-thirds support needed to override a certain presidential veto. Despite this, markets will view the vote as a key indicator of GOP anxiety; specifically, how an escalating conflict with Iran could spike crude prices, fuel cost-of-living pressures, and alienate voters ahead of the midterms.
Quote of the Day
"We need Hawaii just as much and a good deal more than we did California.”
William McKinley
March 4 in history
“Tariff Man” William McKinley inaugurated as 25th US President in 1897.
Topic
GENERAL DISCLOSURE/ DISCLAIMER (For Macroeconomics, Currencies, Interest Rates & Digital Assets)
The information herein is published by DBS Bank Ltd and/or DBS Bank (Hong Kong) Limited (each and/or collectively, the “Company”). It is based on information obtained from sources believed to be reliable, but the Company does not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained herein does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. The information herein is published for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice. The Company, or any of its related companies or any individuals connected with the group accepts no liability for any direct, special, indirect, consequential, incidental damages or any other loss or damages of any kind arising from any use of the information herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication thereof, even if the Company or any other person has been advised of the possibility thereof. The information herein is not to be construed as an offer or a solicitation of an offer to buy or sell any securities, futures, options or other financial instruments or to provide any investment advice or services. The Company and its associates, their directors, officers and/or employees may have positions or other interests in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking or financial services for these companies. The information herein is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction (including but not limited to citizens or residents of the United States of America) where such distribution, publication, availability or use would be contrary to law or regulation. The information is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction (including but not limited to the United States of America) where such an offer or solicitation would be contrary to law or regulation.
[#for Distribution in Singapore] This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) which is Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 65-6878-8888 for matters arising from, or in connection with the report.
DBS Bank Ltd., 12 Marina Boulevard, Marina Bay Financial Centre Tower 3, Singapore 018982. Tel: 65-6878-8888. Company Registration No. 196800306E.
DBS Bank Ltd., Hong Kong Branch, a company incorporated in Singapore with limited liability. 18th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong SAR.
DBS Bank (Hong Kong) Limited, a company incorporated in Hong Kong with limited liability. 11th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong SAR.
Virtual currencies are highly speculative digital "virtual commodities", and are not currencies. It is not a financial product approved by the Taiwan Financial Supervisory Commission, and the safeguards of the existing investor protection regime does not apply. The prices of virtual currencies may fluctuate greatly, and the investment risk is high. Before engaging in such transactions, the investor should carefully assess the risks, and seek its own independent advice.
Related insights
- Research Library04 Mar 2026
- GDP Nowcast: India’s GDP growth likely to moderate in 1Q 04 Mar 2026
- ASEAN-6 markets: Degrees of impact on Middle East risks 04 Mar 2026
Related insights
- Research Library04 Mar 2026
- GDP Nowcast: India’s GDP growth likely to moderate in 1Q 04 Mar 2026
- ASEAN-6 markets: Degrees of impact on Middle East risks 04 Mar 2026