Forex News
- The US Consumer Price Index is expected to rise 2.4% YoY in February.
- Annual core CPI inflation is expected to hold steady at 2.5%.
- EUR/USD’s near-term technical outlook points to a bearish bias despite the recent rebound.
The US Bureau of Labor Statistics (BLS) will publish the February Consumer Price Index (CPI) data on Wednesday. The report is expected to show a stabilization in inflation, still above the Federal Reserve’s (Fed) 2% target.
The monthly CPI is forecast to rise 0.3%, following the 0.2% increase recorded in January, while the annualized reading is seen holding steady at 2.4%. Core CPI figures, which exclude volatile food and energy prices, are expected to come in at 0.2% and 2.5%, on a monthly and yearly basis respectively.
Although inflation data is critical for Fed officials when deciding on the next policy step, the market reaction could remain muted due to the fact that the February CPI prints won’t reflect the impact of rising crude Oil prices on inflation. After the United States (US) and Israel launched a joint military operation against Iran on February 28, the barrel of West Texas Intermediate (WTI) rose sharply from about $67 to above-$110 before correcting lower.
What to expect in the next CPI data report?
CPI figures for February are unlikely to diverge significantly from market expectations. In the past six releases, monthly core CPI readings were either 0.2% or 0.3%. Similarly, CPI was up either 0.2% or 0.3% on a monthly basis in this time frame, with the exception of a 0.4% increase recorded in August, 2025.
The Institute for Supply Management’s (ISM) Purchasing Managers’ Index (PMI) reports painted a mixed picture in regard to input price pressures in the private sector. The Prices Paid Index component of the Manufacturing PMI survey jumped to 70.5 in February from 59 in January, while the Prices Paid Index of the Services PMI survey declined to 63 from 66.6.
Previewing the inflation data, “the February CPI report this week should begin to show a moderation in services inflation that will help build confidence for the FOMC”, said TD Securities analysts.
“Core CPI likely moderated in February to 0.23% m/m owing to a slower rise in services along with more modest tariff pass-through. We look for the headline to accelerate to 0.25% m/m as energy prices rebounded. Our forecast translates to 2.5% and 2.4% y/y for core and headline, respectively,” they explained.
How could the US Consumer Price Index report affect EUR/USD?
Markets virtually see no chance of a Fed interest rate cut in March and only price in about a 12% probability of a 25 basis-points (bps) reduction in April, according to the CME FedWatch Tool. The odds of a fourth consecutive policy hold in June, after the central bank decided to keep interest rates unchanged in January, climbed to nearly 70% in the first few days after the US-Iran war started. Disappointing labor market data, which showed a decrease of 92,000 in Nonfarm Payrolls in February, and easing crude Oil prices, however, dragged that probability back below 60%.
A significant negative surprise in the monthly core CPI print, a reading at or below 0%, could cause investors to reassess the odds of a rate cut in June and cause the US Dollar (USD) to come under selling pressure with the immediate reaction. Conversely, a reading above 0.3% in this data could boost the USD by casting doubt on a policy-easing step in June.
Still, investors could refrain from taking large positions based on this data alone, given the uncertainty surrounding the inflation outlook from March on because of the volatility in energy prices caused by the US-Iran war.
Eren Sengezer, FXStreet European Session Lead Analyst, shares a brief technical outlook for EUR/USD.
“The Relative Strength Index (RSI) indicator on the daily chart rebound from near-30 but stays below 50, suggesting that EUR/USD is yet to complete a bullish reversal. Additionally, the pair remains below the strong 1.1675-1.1700 resistance area, reinforced by the 200-day Simple Moving Average (SMA), the Fibonacci 61.8% retracement of the November-January uptrend and the 100-day SMA.”
“In case EUR/USD fails to reclaim this region, 1.1600-1.1590 (static level, Fibonacci 78.6% retracement) could be seen as the first support area before 1.1500-1.1470 (static level, beginning point of the uptrend). Looking north, technical resistance levels could be spotted at 1.1750 (Fibonacci 50% retracement) and 1.1820 (Fibonacci 38.2% retracement).”
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
- WTI Oil trades around $86.30 on Wednesday as geopolitical tensions in the Middle East support prices.
- G7 energy ministers support, in principle, the use of strategic Oil reserves to stabilize the market.
- The International Energy Agency could propose a record release of about 400 million barrels to ease supply pressures.
West Texas Intermediate (WTI) US Oil trades around $86.30 on Wednesday at the time of writing, up 1.20% on the day as markets remain focused on escalating geopolitical tensions in the Middle East and potential policy responses aimed at stabilizing global energy supply.
Energy ministers from the Group of Seven (G7) said in a statement on Wednesday that they support “in principle” the use of strategic Oil reserves to address current disruptions in the global Oil market. The announcement comes as Crude prices remain elevated amid fears that the war involving the United States (US), Israel and Iran could significantly disrupt energy flows from the Gulf region. However, French Industry and Energy Minister Roland Lescure said that no final decision has yet been made on releasing Oil stockpiles, noting in an interview with RMC Radio that the issue will be discussed by G7 leaders.
According to a report from the Wall Street Journal, the International Energy Agency (IEA) has proposed what could be the largest coordinated release of Oil reserves in its history, potentially reaching about 400 million barrels. The proposal was discussed during an emergency meeting held on Tuesday among officials from the IEA’s 32 member countries to assess the impact of the Middle East conflict on global energy markets.
The near-total closure of the Strait of Hormuz remains a central concern for traders. This critical maritime chokepoint normally carries roughly one-fifth of the world’s Oil supply. Iranian attacks on Oil tankers and the risk of maritime mines have significantly disrupted shipments through the corridor.
Meanwhile, military tensions continue to intensify in the region. The US Central Command reported that US forces eliminated sixteen Iranian mine-laying vessels near the Strait of Hormuz. At the same time, the Israel Defense Forces launched a new wave of strikes inside Iran after explosions were reported in Tehran, while also targeting infrastructure linked to Hezbollah in Lebanon.
Supply disruptions are already becoming visible. Several major Middle Eastern producers, including Saudi Arabia, the United Arab Emirates, Kuwait and Iraq, have collectively reduced output by more than six million barrels per day as shipping through the Strait of Hormuz remains severely constrained. In addition, the largest Oil refinery in the United Arab Emirates halted operations after being hit by a drone strike.
Analysts at Rabobank warn that current Oil prices may not yet fully reflect the risks linked to the escalating conflict around the Strait of Hormuz. According to the bank, a strategic reserve release coordinated by the IEA could temporarily ease market pressure, but it would not eliminate the deeper uncertainty surrounding the physical availability of energy supplies in the region.
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.
MUFG’s Head of Research Derek Halpenny highlights that the Pound is currently the third best performing G10 currency since the conflict began, supported by a sharp 35 bps jump in UK 2-year yields and reduced BoE rate-cut pricing. He contrasts this with 2022’s Russia-related energy shock and warns that higher energy and food prices could pressure real incomes and inflation expectations.
Pound outperforms as BoE cuts repriced
"The performance of the pound stands out."
"In fact, the pound is the third best performing G10 currency since the conflict began, with only the Australian and Canadian dollars performing better."
"That is certainly somewhat surprising based on the most recent episode – the Russia-related energy shock in 2022."
"The MPC will certainly be more wary of cutting rates given the fact that there are already a number of hawks who were concerned, prior to this energy price spike, about the continued stickiness of underlying inflation."
"Yield certainly appears to be providing the pound with support but whether that would persist is questionable given the potential hit to real incomes."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Deutsche Bank’s US economists flag February CPI as a key release for Federal Reserve expectations after the recent Oil shock delayed rate-cut pricing. They anticipate tariff-related strength in core goods and higher energy costs lifting headline inflation, while core CPI is seen steady. The print will help shape market views on policy beyond next week’s widely expected Fed hold.
Inflation print to guide rate expectations
"US data remains firmly in focus today with the release of the February CPI report."
"This is a key print, as the recent oil shock has pushed back market expectations for the next Fed rate cut."
"While the Fed is widely expected to hold rates steady at next week’s meeting, today’s data will help shape expectations for subsequent decisions."
"Our US economists are watching for tariff related strength in core goods, particularly apparel, alongside recent gains in wholesale used car prices."
"Overall, they expect headline CPI to rise by +0.27%, boosted by a +1.0% increase in energy prices, keeping the year-on-year rate at +2.4%."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Nomura’s Senior European Economist Andrzej Szczepaniak notes that traders have increased pricing for European Central Bank rate hikes after hawkish comments from ECB members Kazimir, Kazaks. He stresses that next week’s ECB meeting is unlikely to deliver action, with stale staff forecasts and upcoming inflation expectations surveys becoming crucial.
Hawkish ECB rhetoric meets Oil-driven risks
"Bloomberg headline: *TRADERS ADD TO ECB RATE BETS, PRICE 30BPS OF HIKES BY YEAR-END"
"This is in response to the Kazimir comments that a rate hike is maybe closer than thought, and at the same time Kazaks noted the ECB could act if the war raises inflation expectations – i.e., the insurance rate hike scenario we outlined."
"Kazaks’ comments indicate some in the ECB may want to be extremely proactive in response to the Iran conflict even if the ECB’s Q4 2028 HICP inflation forecasts are unchanged as oil futures shift lower."
"It is important to note both Kazimir and Kazaks are hawks, and they are saying hawkish things."
"Nonetheless, any action at next week’s meeting is off the table, and it is worth noting the ECB staff forecasts will be stale (cut off for financial market technical assumptions is 24-25 February, i.e., before the conflict began)."
"Surveys on inflation expectations will therefore become extremely important in the coming months."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Commerzbank’s Antje Praefcke expects Swedish inflation to stay below target and sees little chance of a near-term Riksbank cut. She argues the bank will focus on upside inflation risks from the energy shock and downside risks to growth, with March likely too early for policy changes even if forecasts in the monetary policy report are adjusted.
Low inflation but no quick rate cuts
"The Riksbank expects both inflation rates to fall well below the inflation target by the end of the year before stabilizing close to it."
"However, it will likely be some time before it adjusts its monetary policy accordingly."
"To make matters worse, the outlook for inflation has deteriorated in light of the energy price shock."
"No central bank is likely to consider lowering interest rates again quickly before it is clearer how long the Iran conflict and high energy prices will last."
"However, this report is likely to continue to be dominated by references to the upside risks for inflation and the downside risks for the real economy."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Silver prices (XAG/USD) fell on Wednesday, according to FXStreet data. Silver trades at $86.96 per troy ounce, down 0.25% from the $87.18 it cost on Tuesday.
Silver prices have increased by 22.34% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 86.96 |
1 Gram | 2.80 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 59.59 on Wednesday, broadly unchanged from 59.54 on Tuesday.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
(An automation tool was used in creating this post.)
- Indian Rupee faces challenges due to hedging demand and foreign portfolio outflows.
- Market sentiment improves as crude prices decline after reports that the IEA may release record oil reserves.
- The US Dollar could regain ground on rising safe-haven demand amid growing uncertainty over the Middle East conflict.
USD/INR moves little as the Indian Rupee (INR) pressure from hedging demand and foreign outflows offsets improved sentiment, boosted by easing oil prices. Oil prices decline after reports that the International Energy Agency (IEA) may release record oil reserves to stabilize markets. Traders may expect an intervention by the Reserve Bank of India (RBI) to cap the downside of the rupee.
Indian equities struggle due to concerns about artificial intelligence’s impact on the country’s IT sector, though the ongoing Middle East war has largely overshadowed these worries.
India’s one-year and two-year OIS rates have climbed more than 45 basis points each since the Israeli–US conflict with Iran began on February 28, while the benchmark 10-year bond yield has risen by a comparatively modest 11 basis points through Monday before trimming part of the increase. At current levels, swap rates are pricing in nearly two rate hikes by the Reserve Bank of India over the next 12 months.
West Texas Intermediate (WTI) crude oil price gave up gains from the previous session, trading around $82.30 per barrel during the Asian hours on Wednesday. However, the downside in oil prices may remain limited due to rising uncertainty surrounding the Iran conflict and shipping disruptions through the crucial Strait of Hormuz.
The IEA’s proposed drawdown would exceed the 182 million barrels released in 2022 following Russia’s invasion of Ukraine. It is worth noting that India relies heavily on oil imports to meet its energy needs and remains highly sensitive to fluctuations in oil prices.
The US Dollar (USD) could regain ground on increased safe-haven demand amid rising uncertainty surrounding the Middle East conflict. US President Donald Trump said late Monday that the Middle East conflict could end soon. However, US officials indicated on Tuesday that military operations were intensifying in Iran, with limited prospects for diplomatic negotiations, Reuters reported.
Traders await key US Consumer Price Index (CPI) data due later in the day. Focus will then shift toward Friday’s Personal Consumption Expenditures (PCE) Price Index data. These figures may offer fresh signals on the Federal Reserve’s policy outlook.
Technical Analysis: USD/INR remains above nine-day EMA near 92.00
USD/INR trades around 92.30 at the time of writing, slightly below the previous close. The technical analysis of the daily chart indicates a persistent bullish bias as the pair remains within the ascending channel pattern.
The USD/INR pair holds a clear bullish near-term bias as price consolidates near recent highs above the rising 50-day Exponential Moving Average, while the nine-day EMA tracks just below spot and underpins the latest upswing. Momentum remains positive with the 14-day Relative Strength Index (RSI) hovering in the mid-60s, staying below overbought territory after failing to break higher, which signals persistent but moderated buying pressure rather than exhaustion at current levels.
Immediate resistance is seen at the ascending channel’s upper boundary near the all-time high of 92.81. On the downside, initial support appears at the nine-day EMA at 92.06, followed by the channel’s lower boundary near 91.30.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | INR | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.23% | -0.26% | 0.00% | -0.18% | -0.74% | -0.25% | -0.08% | |
| EUR | 0.23% | -0.02% | 0.22% | 0.06% | -0.50% | -0.01% | 0.16% | |
| GBP | 0.26% | 0.02% | 0.23% | 0.08% | -0.48% | 0.00% | 0.17% | |
| JPY | 0.00% | -0.22% | -0.23% | -0.18% | -0.74% | -0.27% | -0.09% | |
| CAD | 0.18% | -0.06% | -0.08% | 0.18% | -0.56% | -0.07% | 0.09% | |
| AUD | 0.74% | 0.50% | 0.48% | 0.74% | 0.56% | 0.49% | 0.68% | |
| NZD | 0.25% | 0.01% | -0.01% | 0.27% | 0.07% | -0.49% | 0.19% | |
| INR | 0.08% | -0.16% | -0.17% | 0.09% | -0.09% | -0.68% | -0.19% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Societe Generale analysts highlight that AUD/USD has broken out of consolidation and is in a steady uptrend, supported by its 50‑DMA. The bank notes bullish momentum with a potential return towards 0.72 and upside targets at 0.7220/0.7250 and 0.7400. Short‑term support is seen around 0.6940/0.6900 and 0.7050.
Uptrend intact with higher targets
"AUD/USD broke out of a broad consolidation in January, establishing a steady uptrend."
"During the recent brief pause, the pair successfully held above its 50‑DMA (currently near 0.6940)."
"It is now attempting to break above the upper boundary of its recent range, signalling a potential resumption of the uptrend."
"The next objectives could be located at the projections of 0.7220/0.7250 and 0.7400. The 50‑DMA at 0.6940/0.6900 is expected to act as a short‑term support zone."
"Breakout momentum intact underlines bullish set up. Return towards 0.72 in play as speculation builds of RBA hike next week (OIS implied 66%). Support 0.7050, resistance 0.7250."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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