Forex News
- NZD/USD holds gains despite New Zealand’s Performance of Services Index easing to 50.9 in January from 51.7.
- US Dollar may weaken after softer January CPI boosted expectations of Fed rate cuts later this year.
- US Consumer Price Index rose 2.4% YoY in January; monthly inflation eased to 0.2%, both below forecasts.
NZD/USD inches higher after registering modest gains in the previous session, trading around 0.6040 during the Asian hours on Monday. The pair maintains its gains after New Zealand’s Performance of Services Index (PSI) slipped to 50.9 in January from 51.7 previously, signaling softer confidence as holiday closures and seasonal slowdowns weighed on enquiries.
The Reserve Bank of New Zealand’s (RBNZ) latest monetary conditions survey showed on Friday that inflation expectations increased over both one-year and two-year horizons for Q1 2026. Two-year expectations, viewed as the period when policy changes feed through to prices, rose to 2.37% in Q1 2026 from 2.28% in Q4 2025. One-year expectations climbed to 2.59% from 2.39% in the previous quarter.
The NZD/USD pair could extend gains as the US Dollar (USD) may soften following weaker January CPI data, reinforcing expectations that the Federal Reserve (Fed) may cut rates later this year. US CPI rose 2.4% YoY in January, easing from 2.7% and below the 2.5% forecast, while monthly inflation slowed to 0.2% from 0.3%.
Meanwhile, Chicago Fed President Austan Goolsbee said in a Yahoo Finance interview that although rates are likely to move lower, further policy easing depends on continued progress in reducing services inflation.
The CME FedWatch tool suggests that investors now assign nearly a 90% probability to the Fed holding rates steady at its March meeting, up from 81% a week earlier. Markets are pricing in roughly two 25-basis-point cuts by the end of the year, with the first move seen in June at around a 52% probability.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- WTI lacks a firm direction as traders keenly await the second round of the US-Iran talks.
- Geopolitical risks remain in play, supporting Crude Oil prices and limiting the downside.
- Fed rate cut bets keep the USD bulls on the defensive, also supporting the commodity.
West Texas Intermediate (WTI) US Crude Oil prices struggle to capitalize on a modest Asian uptick on Monday and currently trade just below the $63.00 mark, up less than 0.40% for the day. The commodity, meanwhile, remains close to a nearly two-week low touched on Friday as traders keenly await the second round of indirect US-Iran talks this week.
The two countries renewed negotiations earlier this month to tackle their decades-long dispute over Iran's nuclear program. US President Donald Trump said last week that a deal with Iran is possible over the next month. Moreover, Iran has shown readiness for compromises to revive a nuclear deal with the US that delivers economic benefits for both sides. This diminishes the odds of a military confrontation and the risk of supply disruption, which, in turn, acts as a headwind for Crude Oil prices.
The US, however, has dispatched a second aircraft carrier to the region and is preparing for the possibility of a sustained military campaign if the talks do not succeed. In response, Iran’s Revolutionary Guards have warned that they could retaliate against any US military base in case of strikes on their territory. This keeps geopolitical risk premium in play and offer some support to Crude Oil prices, warranting some caution for aggressive bearish traders or positioning for any meaningful decline.
Meanwhile, softer US consumer inflation figures released on Friday lifted market bets that the US Federal Reserve (Fed) will lower borrowing costs in June. This, in turn, fails to assist the US Dollar (USD) in attracting any meaningful buyers, which, in turn, is seen as acting as a tailwind for the USD-denominated commodity. Hence, strong follow-through selling is needed to confirm a near-term top for Crude Oil prices around the $66.25 area, or a nearly five-month high touched in January.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- GBP/USD lacks any firm intraday directional bias as traders await this week’s important releases.
- The UK jobs data, along with the CPI report, will influence BoE rate cut bets and influence the GBP.
- The FOMC minutes will drive the USD demand and provide some meaningful impetus to the major.
The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.
The UK jobs report is due on Tuesday and will be followed by the latest consumer inflation figures on Wednesday. The crucial data would influence market expectations about the Bank of England's (BoE) policy outlook amid bets for a 25 basis points (bps) rate cut in March. This, in turn, will play a key role in driving the British Pound (GBP). Apart from this, traders will take cues from the FOMC Minutes on Wednesday for more cues about the Federal Reserve's (Fed) rate-cut path, which would provide a fresh impetus to the US Dollar (USD) and the GBP/USD pair.
Furthermore, the release of UK monthly Retail Sales data on Friday, along with flash PMIs from the UK and the US, might contribute to producing short-term trading opportunities during the latter part of the week. In the meantime, Friday's softer US consumer inflation figures lifted odds that the US central bank will lower borrowing costs in June. Moreover, traders have been pricing in the possibility of at least two Fed rate cuts in 2026. This, along with threats to the central bank's independence and the bullish sentiment, acts as a headwind for the safe-haven Greenback.
Apart from this, easing UK political jitters offer some support to the GBP/USD pair, warranting some caution for bearish traders or positioning for any meaningful depreciating move. In fact, UK Prime Minister Keir Starmer received backing from his cabinet and Labour MPs following the fallout from the Jeffrey Epstein files, which led to Morgan McSweeney's resignation as chief of staff.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- Gold may rise after a softer January CPI strengthened expectations of Fed rate cuts later this year.
- US Consumer Price Index rose 2.4% YoY in January; monthly inflation eased to 0.2%, both below forecasts.
- Traders watch renewed US-Iran nuclear talks and US-led Ukraine peace efforts resuming on Tuesday.
Gold (XAU/USD) edges lower after registering over 2% gains in the previous session, trading around $5,030 per troy ounce during the Asian hours on Monday. However, the non-interest-bearing Gold could further gain ground following softer January Consumer Price Index (CPI) figures, which reinforced expectations that the Federal Reserve (Fed) could cut rates later this year. It is important to note that lower yields reduce the opportunity cost of holding non-yielding assets like Gold.
The US Consumer Price Index rose 2.4% year-over-year (YoY) in January, slowing from 2.7% in December and coming in below the 2.5% forecast. On a monthly basis, consumer inflation moderated to 0.2%, down from 0.3% previously and under market expectations of 0.3%.
Moreover, stabilizing the US labor market supports the market's expectations of the Fed keeping rates unchanged in March before delivering two 25-basis-point cuts by year-end. US Nonfarm Payrolls increased by the most in over a year, while the Unemployment Rate unexpectedly declined, pointing to a stabilizing labor market.
Traders are closely watching renewed nuclear negotiations between the US and Iran, along with US-led efforts to end the war in Ukraine, both set to resume on Tuesday. Any setbacks could sway risk appetite and safe-haven flows.
Precious metals, including Gold, stayed underpinned by persistent geopolitical tensions, robust central bank purchases, and investor moves away from sovereign bonds and currencies.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- AUD/USD gains some positive traction on Monday amid a combination of supporting factors.
- The divergent Fed-RBA policy expectations lend support to the AUD amid a positive risk tone.
- Hopes for more stimulus from China benefit the Aussie and back the case for further upside.
The AUD/USD pair attracts some buyers in the vicinity of mid-0.7000s during the Asian session on Monday and, for now, seems to have stalled its corrective pullback from a three-year high, touched last week. Spot prices currently trade around the 0.7080 region, up 0.10% for the day, and seem poised to appreciate further amid a supportive fundamental backdrop.
The US Dollar (USD) continues with its struggle to attract any meaningful buyers and extends its sideways consolidative price in a familiar range held over the past week or so amid dovish Federal Reserve (Fed) expectations. In fact, traders ramped up their bets that the US central bank will lower borrowing costs in June following the release of softer US consumer inflation figures on Friday.
Moreover, the Fed is expected to deliver at least two 25 basis points (bps) rate cut in 2026. This marks a significant divergence in comparison to expectations that the Reserve Bank of Australia (RBA) will hike interest rates again in May, which continues to act as a tailwind for the Australian Dollar (AUD) and validates the constructive outlook for the AUD/USD pair amid a positive risk tone.
Meanwhile, China's inflation figures released last week fueled concerns that deflationary pressures continue to weigh on the world’s second-largest economy. The data raised hopes for more fiscal and monetary stimulus from China, which further benefits the China-proxy Aussie. The focus shifts to the release of the FOMC Minutes on Wednesday and Australian employment details on Friday.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- EUR/USD edges lower amid muted trade due to the US Presidents’ Day and China’s New Year holidays.
- US Dollar may weaken after softer January CPI strengthened expectations of Fed rate cuts later this year.
- The Euro may gain support as the ECB appears largely unconcerned about its recent appreciation.
EUR/USD opens the week on a softer note, trading near 1.1860 during the Asian session on Monday. Activity is likely to remain muted, with United States (US) markets closed for the Presidents’ Day holiday, while Mainland China is also shut for the week-long Lunar New Year break.
Losses in the EUR/USD pair may be limited as the US Dollar (USD) could ease following softer January Consumer Price Index (CPI) figures, which reinforced expectations that the Federal Reserve (Fed) could cut rates later this year.
US CPI rose 2.4% year-over-year (YoY) in January, slowing from 2.7% in December and coming in below the 2.5% forecast. On a monthly basis, consumer inflation moderated to 0.2%, down from 0.3% previously and under market expectations of 0.3%.
Moreover, recent data showed that Nonfarm Payrolls increased by the most in over a year, while the Unemployment Rate unexpectedly declined, pointing to a stabilizing labor market. Markets widely expect the Fed to keep rates unchanged in March before delivering two 25-basis-point cuts by year-end.
According to the CME FedWatch tool, investors now assign nearly a 90% probability to the Fed holding rates steady at its March meeting, up from 81% a week earlier. Markets are pricing in roughly two 25-basis-point cuts by the end of the year, with the first move seen in June at around a 52% probability.
Meanwhile, the Euro (EUR) found support amid signals that the European Central Bank (ECB) remains largely unconcerned about the currency’s recent appreciation. ECB President Christine Lagarde, who stated that the euro area’s inflation outlook is in a “good place,” cautioned against overreacting to short-term or volatile data.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
The Japanese economy expanded 0.1% over the quarter in the fourth quarter (Q4) of 2025, the preliminary report published by the Cabinet Office showed on Monday. This reading marks a reversal from a 0.7% contraction recorded in Q3, though it fell short of market expectations for a 0.4%.
On an annualized basis, Japan’s Gross Domestic Product (GDP) expanded 0.2%, compared with forecasts of 1.6% and the third quarter’s 2.3% decline.
Market reaction
As of writing, the USD/JPY pair is trading just above the 153.00 mark, up nearly 0.55% for the day.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
- USD/JPY kicks off the new week on a positive note and snaps a five-day losing streak.
- The weak Q4 GDP print from Japan tempers BoJ rate hike bets and weighs on the JPY.
- Dovish Fed expectations keep the USD bulls on the defensive and might cap the pair.
The USD/JPY pair attracts some buyers during the Asian session on Monday and climbs back above the 153.00 mark following the disappointing release of Japan's Q4 GDP report. Spot prices, for now, appear to have snapped a five-day losing streak, reaching a two-week low last Thursday, although the upside potential still seems limited.
Data published by Japan’s Cabinet Office revealed that the economy grew 0.1% in the fourth quarter of 2025, compared to a 0.7% contraction recorded in the previous quarter. The reading, however, was below market expectations and tempered bets for an immediate interest rate hike by the Bank of Japan (BoJ). Apart from this, the underlying bullish sentiment exerts some downward pressure on the safe-haven Japanese Yen (JPY) and assists the USD/JPY pair to gain some positive traction at the start of a new week.
Meanwhile, the data is likely to give Japan's Prime Minister Sanae Takaichi impetus to announce more stimulus. Market players, however, remain hopeful that Takaichi could be fiscally responsible. and that her policies will boost the economy. This might prompt the BoJ to stick to its policy normalization path, which should act as a tailwind for the JPY. The US Dollar (USD), on the other hand, struggles to lure buyers amid dovish Federal Reserve (Fed) expectations, which might contribute to keeping a lid on the USD/JPY pair.
According to the CME Group's FedWatch Tool, traders ramped up their bets that the US central bank will lower borrowing costs in June after data released on Friday showed that consumer inflation rose less than expected in January. In fact, the headline US Consumer Price Index (CPI) rose 0.2%, while the core gauge increased 0.3% last month. This, to a larger extent, overshadowed last Wednesday's upbeat US Nonfarm Payrolls (NFP) report and keeps the USD bulls on the defensive, which, in turn, should cap the USD/JPY pair.
Economic Indicator
Gross Domestic Product (QoQ)
The Gross Domestic Product (GDP), released by Japan’s Cabinet Office on a quarterly basis, is a measure of the total value of all goods and services produced in Japan during a given period. The GDP is considered as the main measure of Japan’s economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Read more.Last release: Sun Feb 15, 2026 23:50 (Prel)
Frequency: Quarterly
Actual: 0.1%
Consensus: 0.4%
Previous: -0.6%
Source: Japanese Cabinet Office
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