Replacing Placeholder Variables in a String

I think for such a simple task you don't need to use RegEx:

$variables = array("first_name"=>"John","last_name"=>"Smith","status"=>"won");
$string = 'Dear {FIRST_NAME} {LAST_NAME}, we wanted to tell you that you {STATUS} the competition.';

foreach($variables as $key => $value){
    $string = str_replace('{'.strtoupper($key).'}', $value, $string);
}

echo $string; // Dear John Smith, we wanted to tell you that you won the competition.

I hope I'm not too late to join the party — here is how I would do it:

function template_substitution($template, $data)
{
    $placeholders = array_map(function ($placeholder) {
        return strtoupper("{{$placeholder}}");
    }, array_keys($data));

    return strtr($template, array_combine($placeholders, $data));
}

$variables = array(
    'first_name' => 'John',
    'last_name' => 'Smith',
    'status' => 'won',
);

$string = 'Dear {FIRST_NAME} {LAST_NAME}, we wanted to tell you that you have {STATUS} the competition.';

echo template_substitution($string, $variables);

And, if by any chance you could make your $variables keys to match your placeholders exactly, the solution becomes ridiculously simple:

$variables = array(
    '{FIRST_NAME}' => 'John',
    '{LAST_NAME}' => 'Smith',
    '{STATUS}' => 'won',
);

$string = 'Dear {FIRST_NAME} {LAST_NAME}, we wanted to tell you that you have {STATUS} the competition.';

echo strtr($string, $variables);

(See strtr() in PHP manual.)

Taking in account the nature of the PHP language, I believe that this approach should yield the best performance from all listed in this thread.

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EDIT: After revisiting this answer 7 years later, I noticed a potentially dangerous oversight on my side, which was also pointed out by another user. Be sure to give them a pat on the back in the form of an upvote!

If you are interested in what this answer looked like before this edit, check out the revision history