Forex News

DBS Group Research economist Chua Han Teng expects the People’s Bank of China to keep the 1-year Loan Prime Rate at 3.00% on February 24, as January data are still unfolding. The report says policy remains cautiously accommodative, reflected in a lower USD/CNY fixing below 7.0, with reliance on structural tools and broader easing anticipated toward the second half of 2026.

Loan Prime Rate seen unchanged for now

"The PBOC is expected to keep the 1-year Loan Prime Rate (LPR) unchanged at 3.00%, as January economic data have yet to fully unfold."

"The central bank is maintaining a cautiously accommodative monetary policy stance amid heightening geopolitical tensions."

"This stance is being reflected in a lower USD/CNY fixing, which has breached the psychological 7.0 level."

"The PBoC has been relying more on structural tools to support targeted sectors rather than cutting the Loan Prime Rate or the 7-Day Reverse Repo Rate."

"We expect the PBoC to resume broader easing toward 2H."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

MUFG analysts Lin Li, Michael Wan, Lloyd Chan and Khang Sek Lee highlight an Asia‑centric week dominated by geopolitics, inflation and monetary policy. They expect the Bank of Korea to keep rates on hold through 2026, the Bank of Thailand to cut by 25bps, and China’s loan prime rates to stay unchanged pending clearer policy guidance in March.

Asia policy signals drive FX outlook

"The coming week is heavily Asia‑centric, with geopolitics, inflation dynamics and monetary policy in focus across the region."

"In particular, we expect the Bank of Korea to keep rates on hold with the tone likely to indicate an extended policy rate hold through 2026 given rising house prices and a volatile won, while the BOK’s growth forecasts could also be upgraded in the meeting."

"Meanwhile, we expect the Bank of Thailand to cut rates by 25bps given negative inflation and a generally weak growth outlook notwithstanding better relative clarity from the recent election results."

"We also expect China’s loan prime rates to remain unchanged, with more clarity on China’s monetary policy direction potentially expected after the National Party Congress, Two Sessions and the publication of the full 15th Five-Year Plan in March."

"Meanwhile, Australia’s January CPI will be the first test following the Reserve Bank’s recent rate hike, with inflation expected to ease but remain above target, reinforcing a hawkish bias while keeping policy on hold."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

UOB Global Economics & Markets Research reports that Malaysia’s inflation remained stable in January, slightly below its own forecast and in line with consensus. Despite solid 4Q25 GDP, price pressures are seen as contained, reducing the urgency for policy changes. UOB therefore maintains its view that Bank Negara Malaysia will hold the Overnight Policy Rate at 2.75% throughout 2026.

Contained inflation supports steady policy stance

"Malaysia’s headline inflation remained stable at 1.6% y/y in Jan (Dec: 1.6%), in line with Bloomberg consensus but tad lower than our estimate (1.7%)."

"In our view, despite the strength in 4Q25 GDP, inflation remains contained, thus providing little impetus for Bank Negara Malaysia (BNM) to adjust its monetary policy stance in the near term."

"We maintain our view that the Overnight Policy Rate (OPR) will be kept at 2.75% through 2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

DBS Group Research’s Radhika Rao highlights that Bangko Sentral ng Pilipinas cut its policy rate by 25bps to 4.25%, citing weaker-than-expected recovery, softer confidence and delayed government spending. Official growth forecasts for 2026–27 were lowered, inflation projections nudged higher, and DBS still expects one more 25bps cut as BSP keeps the door open to further easing.

BSP cuts with cautious forward guidance

"The BSP lowered policy rate by 25bps, accompanied by a cautious guidance in light of weaker-than expected recovery, besides softer confidence indices, and delay in government spending on graft-led uncertainty."

"Official growth forecasts were cut to 4.6% for 2026 and 5.9% in 2027 (vs 5.4% and 6.3% earlier)."

"Inflation projections were raised to 3.6% for 2026 from 3.2% previously, while keeping it close to 3% in 2027."

"Yesterday’s guidance was more uncertain, which implies that the door might be open for further easing if the recovery momentum stays weak (we expect one more 25bps cut)."

"To complement an easing policy stance, the BSP lowered reserve requirement rates on a range of bank-issued instruments this month, freeing up liquidity for the domestic banking system."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• AUD/USD gains as weaker US growth offsets firmer inflation, weighing on Dollar.
• Break above 20-day SMA strengthens bullish bias, with 0.7100 as next resistance.
• RSI momentum improves, opening path toward yearly high near 0.7147.

The AUD/USD advances for the second straight day, up by 0.36% as the Greenback edges lower as US economic growth takes a toll while inflation accelerates towards the 3% threshold. At the time of writing, the pair trades at 0.7086, poised to end the week with gains of over 0.19%.

AUD/USD Price Forecast: Technical outlook

The AUD/USD remains upward biased after buyers pushed the exchange rate past above the 20-day Simple Moving Average (SMA) of 0.7034. Following that, they cleared 0.7050 and seem poised to challenge the 0.7100 mark.

Bullish momentum remains intact, with the Relative Strength Index (RSI) aiming higher, after bottoming near 59.34. If the index surpasses 65.00, the AUD/USD could clear the next key resistance level and eye the yearly high of 0.7147.

Conversely, if AUD/USD tumbles below 0.7000 the first support would be the February 6 daily low at 0.6897, followed by the 50-day SMA at 0.6832.

AUD/USD Price Chart – Daily

• Gold climbs as weaker GDP and hotter core PCE cloud the Federal Reserve outlook.
• US Dollar slips after the Supreme Court of the United States limits tariffs backed by Donald Trump.
• Markets continue to price two Fed cuts this year despite rising Treasury yields.

Gold prices rally more than 1% on Friday after economic growth in the US decelerated, while inflation rose past the 3% threshold as depicted by the Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) favorite inflation gauge. XAU/USD trades at $5,065 after bouncing off daily lows of $4,981.

Bullion jumps as US growth slows and core PCE tops 3%, stagflation looming?

Breaking news revealed that the US Supreme Court ruled against Trump’s tariffs, imposed under a law intended for national emergencies. This improved risk appetite, as US equities pared earlier losses and turned positive in the day. In the meantime, the US Dollar is on the backfoot, down 0.11% according to the US Dollar Index (DXY).

The DXY, which measures the performance of the American currency against six peers, hovers at around 97.70.

In the meantime, US President Donald Trump said that the Supreme Court decision is disappointing. Nevertheless, he announced that all national security tariffs under sections 232 and 301 remain in place. In the meantime, he added that he will impose 10% global tariffs on top of other duties, under section 122.

Aside from this, economic data in the US showed that the economy is decelerating, according to Gross Domestic Product (GDP) figures for Q4 of last year, while the Core Personal Consumption Expenditures (PCE) Price Index in December increased in the advanced estimates for Q4 of 2025, easing from 4.4% to 1.4% YoY. 

GDP decreased from 4.4% to 1.4% YoY, blamed on the 43-day US government shutdown.

Later, the University of Michigan Consumer Sentiment survey dipped from 57.3 to 56.6 as American households mentioned that “higher prices are eroding their personal finances.” Nevertheless, inflation expectations for one-year dipped from 4% to 3.4%, while for a five-year period remained steady at 3.3%.

In the meantime, US Treasury yields erased their earlier losses and are rising, a headwind for the yellow metal. The US 10-year Treasury note yield is up one basis point at 4.081%.

As of writing, money markets had grown skeptical about a rate cut before June 2026, in which Trump’s nominee Kevin Warsh, if confirmed by the US Congress to become the new Fed Chair, could opt to reduce interest rates.

In the Middle East, the US is weighing whether to target Iranian individuals or pursue regime change, according to the Wall Street Journal. Nevertheless, the reports said that he is considering a limited strike on Iran, though he favors diplomacy.

Money markets are still expecting two 25 basis points rate cuts by the Federal Reserve this year, according to Prime Market Terminal data.

US economic schedule for next week

On the data front, traders will eye the ADP Employment Change 4-week average, Initial Jobless Claims data and the Producer Price Index (PPI) report for January. Aside from this, investors will eye speeches by Federal Reserve officials and unscheduled press conferences by US President Donald Trump.

Technical outlook: Gold buyers reclaim $5,000 eyes on $5,100 for further gains

The technical picture shifted neutral to bullish biased, but buyers need to clear the $5,100 milestone to have the chance of driving the yellow metal to retest higher prices. If cleared, the next resistance area will be $5,200, followed by the $5,451 January 30 high. Overhead lies the record high near $5,598.

Conversely, if Gold stays around $5,000-$5,050, it could remain range-bound as traders wait for further catalysts. However, a dip beneath the bottom of the range would expose the February 17 daily low at $4,841, followed by the 50-day Simple Moving Average (SMA) at $4,681.

MUFG’s Senior Currency Analyst Lloyd Chan notes that Bank Indonesia kept its 2026 growth forecast at 4.9%–5.7% and still expects inflation to stay within its 1.5%–3.5% target. However, upside inflation risks could weigh on the Rupiah if policymakers let the economy run hotter. Higher bond yields and overvalued 10‑year bonds add to policy trade-offs for BI as it considers gradual easing.

Growth targets held as inflation risks tilt up

"BI maintains its 2026 growth forecast at 4.9%–5.7% and continues to expect inflation to remain within its 1.5%–3.5% target range this year. However, inflation risks are skewed to the upside if policymakers allow the economy to run hotter and the output gap narrows further. Higher inflation would be a drag on the rupiah."

"At the margin, demand at recent bond auctions has also weakened: the 18 February auction recorded the lowest bid‑to‑cover ratio since March 2025, at just 1.71x for the 10‑year bond, well below the average levels seen in 2024-2025. The 5‑year tenor similarly saw a soft outcome, with a bid‑to‑cover ratio of 1.47x, the lowest since May 2024."

"Our model suggests that 10‑year government bonds appear overvalued relative to macro fundamentals, while the technical picture points to further upside in bond yields, reinforcing near‑term headwinds for the rupiah."

"There has been a net increase in SRBI outstanding since November 2025, while SRBI yields have also risen by around 11-14bp since September last year. This has likely underpinned a modest pickup in non-resident inflows to SRBI since December. At the margin, these inflows could provide a modest offset to foreign outflows from equities and government bonds."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

The US Dollar (USD) held firm on Friday after the release of top-tier data, but the US Dollar Index (DXY) posted an acceptable weekly gain of almost 1%. The December Core Personal Consumption Expenditures (PCE) rose by 3% YoY, above market forecasts, signalling an uptick in inflation pressures and supporting the USD. Additionally, the US flash Q4 Gross Domestic Product (GDP) fell to 1.4% from the 3% expected, impacting investors' attraction to the Greenback.

The US Dollar Index (DXY) is trading near the 97.80 level, struggling to attract buyers after weaker-than-expected GDP. On Monday, the US will release the December Factory Orders. On Tuesday, the ADP Employment Change 4-week average, the December Housing Price Index and the February Consumer Confidence reports will be released. On Thursday, Initial Jobless Claims will be the focus of the American session. Last but not least, the US will release the Chicago Purchasing Managers Index (PMI).

EUR/USD is trading near the 1.1780 price region, with the USD slipping after the United States (US) Supreme Court ruled against President Donald Trump's tariffs. On Monday, the German IFO reports will be released alongside the Italian January CPI. On Wednesday, Germany's GDP and March’s GfK Consumer Confidence Survey will be in the spotlight. On Thursday, the Eurozone February Business Climate, Consumer Confidence and Economic Sentiment Indicator will be released. On Friday, Germany will release its Unemployment Change and Rates alongside Spain’s February flash Harmonized Index of Consumer Prices (HICP).

GBP/USD is trading near the 1.3490 price zone, losing ground throughout the week, as United Kingdom (UK) jobs and inflation data both supported a BoE interest rate cut next month, bolstering market expectations of such a move.

AUD/USD is trading near 0.7080 after having moved up and down during the day, but staying in the green as the American session fades. Australia will release the Private Capital Expenditure on Thursday.

USD/JPY is trading near the 155.10 price zone, trimming almost all its gains after weaker-than-expected US data. On Thursday, Japan will see the January Large Retailer Sales, Retail Trade, and the Retail Trade S.A.

USD/CAD is trading near the 1.3690 price region, little changed after Canadian Retail Sales declined 0.4% MoM in December, slightly better than the expected 0.5% drop but reversing November’s 1.2% increase. On Thursday, Canada will release the Current Account report.

Gold is trading at $5,077, trimming almost all of this week’s losses as market uncertainty stepped up.

Anticipating economic perspectives: Voices on the horizon

Monday, February 23:

• BoE's Taylor.
• Fed’s Waller.
• ECB’s Lagarde.

Tuesday, February 24:

• Fed's Goolsbee.
• Fed's Bostic.
• Fed's Collins.
• Fed's Cook.
• Fed's Barkin.

Wednesday, February 25:

• US President Donald Trump.
• RBA Governor Bullock.
• Fed's Schmid.
• Fed's Musalem.

Thursday, February 26:

• ECB’s Lagarde.
• BoE’s Lombardelli.
• Fed's Bowman.

Friday, February 27:

• BoE’s Pill.
• ECB’s Kocher.

Central banks' meetings and upcoming data releases to shape monetary policies

Sunday, February 22:

• NZD Retail Sales.

Wednesday, February 25:

• Australian CPI.

Thursday, February 26:

• Tokyo CPI.

Friday, February 27:

• Swiss GDP (Q4).
• Germany’s February flash CPI.
• Germany’s February flash HICP.
• Canadian GDP (Q4).
• US Producer Price Index (PPI)

(This story was corrected on February 20 at 21:16 GMT to say that the EUR/USD pair did not slip; instead, the USD declined after the US Supreme Court ruled against Trump's tariffs.)