Global Watch September 2026
The collapse of the ceasefire agreed between the US and Iran in June has triggered a renewed rise in global energy prices. This in turned has re-ignited inflation concerns, resulting in a marked firming of central bank rate hike expectations and a surge in bond yields. The Fed and ECB both raised rates this month, while the Bank of England has indicated it may do so soon. We expect all three central banks to increase their respective policy rates by 50bps over the next six months. The main currency pairs have, for the most part, remained in fairly well-established ranges since the outbreak of the Iran war. We see this continuing over the next 12-15 months. Our updated forecasts envisage ranges of $1.13-$1.20 and £0.83-£0.89 for EURUSD and EURGBP respectively over this period.