Forex News

Danske Research Team expects US growth to cool further in 2026 despite a slightly higher GDP forecast, citing structural headwinds. Inflation is projected to remain contained, with both headline and core measures near 2.5%. The bank now anticipates the Federal Reserve will cut rates twice in 2026 and then hold policy steady through 2027.

Fed seen cutting then holding rates

"We lift our 2026 GDP growth forecast to 2.0% (from 1.8%) but maintain 2027 at 1.7%. Stagnant labour supply growth and cooling wage growth are set to weigh on household consumption growth, which is only partially compensated by rising fixed investment spending."

"Inflation continues to evolve mostly in line with our forecasts despite the distortions that affected data in Q4. Slowing housing and unit labour cost growth will maintain overall inflation in check, even though tariff pass-through will still lift goods and food prices in 2026."

"We forecast headline inflation at 2.4% in 2026 (from 2.5%) and 2.4% in 2027 (unchanged). We forecast core inflation at 2.5% in 2026 (from 2.8%) and 2.6% in 2027 (unchanged)."

"We expect the Fed to deliver two more 25bps rate cuts in June and September (prev. March and June) and then maintain the terminal rate of 3.00-3.25% through the rest of 2026 and 2027 (unchanged). Risks around the outlook are balanced."

"Sudden slowdown in private consumption could tilt the Fed towards resuming more aggressive rate cuts, but fiscal easing and stronger global manufacturing boom could allow the Fed to maintain rates at current levels for longer."

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

OCBC strategists Sim Moh Siong and Christopher Wong highlight that recent US labour data and escalating Middle East tensions are supporting the Dollar. Stabilising jobless claims and sharply lower Challenger layoffs precede a key payrolls release that could shift the Federal Reserve toward a more symmetric stance. A stronger-than-expected jobs report is seen as potentially alleviating US growth concerns and underpinning USD strength.

Jobs data and energy shock support USD

"While geopolitics has dominated market attention, recent US data also point toward potential USD upside. Challenger job cuts fell 72% YoY to 48.3k in February, with the 12-month moving average easing to 93.1k. Initial jobless claims held steady at 213k—slightly below expectations—underscoring stabilising labour market even though hiring remains soft."

"Attention now shifts to today’s employment report, where consensus looks for a 55k rise in nonfarm payrolls and an unchanged 4.3% unemployment rate. A stronger-than-expected print would likely alleviate US growth concerns despite lingering risks from elevated energy prices. Conversely, a miss could amplify growth worries more than in previous months, given the added uncertainty around energy markets and AI-related disruption."

"Stabilising labour data and the potential for payrolls print beat could tilt the Fed toward a more balanced policy stance. Markets may be underestimating USD-supportive risks if today’s jobs report beats expectations."

"A sufficiently strong payrolls number may push the Fed toward a more symmetric policy stance—signalling that its next move could be either a cut or a hike. That would mark a shift from the recent easing bias and would be supportive of the USD, especially if the report helps dispel persistent fears of labour market deterioration."

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

• Silver price consolidates around $82.80 ahead of the US NFP data for February.
• Dovish Fed bets for the July policy meeting have squeezed after upbeat ADP Employment data.
• Iran conflicts are expected to continue supporting demand for safe-haven assets.

Silver price (XAG/USD) trades broadly sideways around $82.80 during the European trading session on Friday. The white metal consolidates as investors await the United States (US) Nonfarm Payrolls (NFP) data for February, which will be published at 13:30 GMT.

Investors will pay close attention to the US NFP data to get fresh cues on the Federal Reserve’s (Fed) monetary policy outlook. Traders trimmed dovish Fed bets for the July policy meeting after the release of the US ADP Employment data for February on Wednesday, which showed that the number of fresh jobs created in the private sector was higher than projected.

The CME FedWatch tool shows that the odds of the Fed holding interest rates steady in the July policy meeting have increased to 51.7% from 25.3% seen a week before.

The US NFP report is expected to show that employers hired 59K fresh jobs, significantly lower than 130K in January. The Unemployment Rate is seen as steady at 4.3%. Meanwhile, Average Hourly Earnings, a key measure of wage growth, is estimated to have remained steady at 3.7% Year-on-Year (YoY).

Signs of strong labor demand and accelerating wage growth would further prompt expectations that the Fed will hold interest rates steady in the near term, a scenario that will be unfavorable for the Silver price. Non-yielding assets, such as Silver, remain on edge in a steady interest rate environment.

On the geopolitical front, the escalating war in the Middle East, which involves the US, Israel, and Iran, is expected to continue offering support to the Silver price. Safe-haven assets, such as Silver, tend to perform better in a heightened geopolitical environment.

Silver technical analysis

XAG/USD trades at around $83.21at the press time. The near-term bias seems neutral as the price trades close to the 20-day Exponential Moving Average (EMA), which has also started to flatten around $84.80 and no longer offers directional support. The sequence of lower highs from the mid-$110s into the recent $90 area underscores waning upside momentum, while the 14-day Relative Strength Index (RSI) wobbling inside the 40.00-60.00 zone, signaling a lack of strong buying pressure and favoring a defensive tone.

Immediate resistance emerges at the 20-day EMA near $84.80, followed by the recent swing area around $90.00, where prior rebounds stalled. A daily close above $90.00 would be needed to ease the current downside bias and reopen the way toward the mid-$90s. On the downside, initial support sits near the recent $82.00 low, with a break exposing the $78.00 region as the next key floor. A sustained move below $78.00 would confirm a deeper corrective phase toward the mid-$70s zone.

(The technical analysis of this story was written with the help of an AI tool.)

ING strategists Warren Patterson and Ewa Manthey report that Copper prices have softened as LME inventories jump to a 16‑month high, suggesting supply is outpacing demand. They link the build to changing regional pricing incentives between LME and Comex and warn that continued stock increases could leave Copper vulnerable to further consolidation unless Chinese restocking emerges.

LME stock build pressures near term

"Copper prices softened on Thursday as a sharp rise in exchange inventories reinforced concerns that supply is outpacing demand. LME copper fell around 1.2% to settle near $12,900/t, while stocks tracked by the exchange jumped almost 8% on the day to a 16‑month high."

"The inventory build reflects strong inflows into LME warehouses, driven by shifting regional pricing incentives. LME copper has been trading at only a narrow premium to Comex, reversing last year’s structure that encouraged metal to flow into US warehouses."

"As these pricing signals normalise, metal is increasingly being redirected back into global exchange stocks."

"The inventory surge creates a tougher near‑term backdrop for prices. The key things to watch are whether LME stocks continue to build at this pace, the evolution of LME–Comex spreads, and signs of restocking from China once price pressure eases—all of which will determine whether copper can stabilise or remains vulnerable to further consolidation."

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

• EUR/GBP trades around 0.8680 on Friday, down 0.10% on the day.
• Eurozone fourth-quarter growth was revised lower, highlighting modest economic momentum.
• Markets sharply scale back expectations for a BoE rate cut in March as energy prices rise.

EUR/GBP trades around 0.8680 on Friday at the time of writing, losing 0.10% on the day as investors assess contrasting economic outlooks in the Eurozone and the United Kingdom (UK).

In the Eurozone, the latest data confirmed that economic growth remained modest in the fourth quarter. Gross Domestic Product (GDP) expanded by 0.2% QoQ in the fourth quarter, below the earlier estimate of 0.3% and slightly lower than the 0.3% growth recorded in the third quarter. On an annual basis, growth came in at 1.2%, also revised down from the preliminary estimate.

Despite easing inflation and lower interest rates, the Eurozone economy continues to face several headwinds, including trade tensions linked to United States (US) tariffs on European imports. For the full year 2025, economic growth still reached 1.4%, marking an acceleration compared with the 0.9% recorded in 2024.

Meanwhile, the Accounts of the latest European Central Bank (ECB) meeting showed that policymakers discussed the outlook for inflation in the Eurozone, noting that inflation could potentially fall further below the central bank’s 2% target.

However, the meeting took place before the escalation of geopolitical tensions between the US and Iran. The conflict could alter the global economic outlook, particularly for Europe, which relies heavily on energy imports.

In the United Kingdom, expectations for monetary policy have shifted in recent days. Rising energy prices linked to the Middle East war are increasing the risk of additional inflationary pressures, reducing the likelihood of a near-term rate cut by the Bank of England (BoE). According to Reuters, analysts at Capital Economics now believe that a rate cut at the March 19 meeting is unlikely unless tensions in the region ease quickly.

The latest fiscal projections published in the Spring Statement delivered by Chancellor Rachel Reeves also highlight a more uncertain economic outlook. The Office for Budget Responsibility (OBR) lowered its forecast for UK growth this year to 1.1%, down from the 1.4% projected in November, while warning that the Middle East war could have significant consequences for both the global and UK economies.

Against this backdrop, markets have sharply adjusted their expectations for the Bank of England’s policy path. Investors now price only around a 20% chance of a rate cut in March, down from roughly 75% a week ago, with just a single 25-basis-point reduction expected over the course of the year.

"Ahead of the Middle East crisis, a March 19 BoE rate cut had been widely expected by the market, with further easing looking likely later in the year. Currently, the market is priced for just one more 25 bp BoE rate cut this cycle on a 6-month view, while market expectations for a rate cut this month have fallen sharply", notes Rabobank’s Senior FX Strategist Jane Foley.

Brown Brothers Harriman’s (BBH) Elias Haddad notes that the February NFP report will be crucial for assessing whether the US labor market is genuinely strengthening or if January’s strong gains were a one-off. The bank highlights downside revision risks to January payrolls and stresses that labor-market outcomes will drive Fed easing expectations and the US Dollar’s safe-haven appeal.

Labor data to steer Dollar path

"But the real test for Fed funds rate expectations comes today with the February nonfarm payrolls (NFP) report (1:30pm London, 8:30am New York). The data will reveal whether the US labor market is truly on a more solid footing or if January’s strong NFP number was merely a blip. Consensus is looking for +55k job gains vs. +130k in January and the unemployment rate is seen unchanged at 4.3% in February, a tick below the FOMC 2026 median projection (4.4%)."

"The risk is a big revision downward to the solid NFP gains last January because of conflicting signals in private sector job gains. The Bureau of Labor Statistics (BLS) reported the private sector added +172k jobs in January while ADP and Revelio private payrolls were up just +11k and +17.4k, respectively."

"If the NFP data for February are consistent with the stronger job creation and low unemployment rate initially reported in January, it would reinforce the Fed’s cautious easing guidance and add a tailwind to the USD safe haven bid. But a weak February NFP and/or a significant downward revision to the good labor market news of January would rekindle Fed funds rate cut expectations and curb safe haven demand for USD."

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

• Nonfarm Payrolls are expected to rise by 59K in February.
• The Unemployment Rate is seen holding steady at 4.3%.
• Employment data could lift volatility further while investors navigate through the Middle East crisis.

The United States (US) Bureau of Labor Statistics (BLS) will release the Nonfarm Payrolls (NFP) data for February at 13:30 GMT.

Volatility around the US Dollar (USD) will likely ramp up on the employment report, with investors looking for fresh insights on the US Federal Reserve’s (Fed) path forward on interest rates, especially after the crisis in the Middle East revived concerns over rising inflation.

What to expect from the next Nonfarm Payrolls report?

Investors expect NFP to rise by 59K following the impressive 130K increase recorded in January. The Unemployment Rate is expected to remain unchanged at 4.3%, while the annual wage inflation, as measured by the change in the Average Hourly Earnings, is projected to hold steady at 3.7%.

Previewing the employment report, TD Securities analysts note that they expect job gains to moderate to 90K in February.

“The moderation should be led by healthcare after it posted unusually strong gains last month. Private payrolls likely saw a 100k gain while government likely declined 10k. We also look for the Unemployment Rate to stay at 4.3%, while we flag the risk of an increase to 4.4%. Average Hourly Earnings likely moderated to 0.2% m/m (3.7% y/y),” they add.

Recent employment-related data releases from the US hinted at relatively healthy labor market conditions in February. The Employment Index of the Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) survey edged higher to 48.8 from 48.1 in January (although still in contraction), while the Automatic Data Processing (ADP) reported that employment in the private sector rose 63K, surpassing the market expectation of 50K. Finally, the Employment Index of the ISM Services PMI survey rose to 51.8 from 50.3, reflecting an acceleration in job creation in the key service sector.

How will the US February Nonfarm Payrolls affect EUR/USD?

The USD has capitalized on safe-haven flows and started the month on a firm footing after the US and Israel carried out a joint attack against Iran, causing EUR/USD to come under heavy bearish pressure.

Earlier in the week, the US Senate rejected a resolution that is designed to force US President Donald Trump to seek congressional approval for further military action against Iran. Additionally, CNN reported that a top US official said that the US will start attacking deeper into Iran, noting that the operation is still in its early days.

From a monetary policy perspective, investors are keeping a close eye on the impact of the Middle East crisis on energy prices and how that could alter the inflation outlook. According to the CME FedWatch Tool, the probability of the Federal Reserve (Fed) leaving the policy rate unchanged in the next three meetings climbed to nearly 70% from about 50% before the US-Iran war started.

While speaking at the Bloomberg Invest Conference earlier in the week, Neel Kashkari, President of the Federal Reserve (Fed) Bank of Minneapolis, said that it is too soon to know how the Iran war will affect inflation, but acknowledged that it could have an impact on monetary policy.

In case NFP comes in at 70K or higher, and the Unemployment Rate remains steady at 4.3% as forecast, markets could assess the employment data as “good enough” for the Fed to continue to delay interest-rate cuts until the second half of the year. In this scenario, the USD could continue to gather strength and trigger another leg lower in EUR/USD.

On the other hand, a significant downside surprise in NFP, a reading at or below 30K, combined with an increase in the Unemployment Rate, would be required for investors to lean back toward a rate cut in June.

Still, the USD’s losses could remain limited in this case unless there is a de-escalation of the conflict in the Middle East. The most bearish scenario for the USD, fueling a decisive rebound in EUR/USD, would be a combination of a sharp correction in Crude Oil prices with the naval activity in the Strait of Hormuz returning to normal, and an employment report that highlights worsening labor market conditions.

Societe Generale analysts note that they expect a solid NFP print after “four out of four US labour market anecdotes surprised to the upside.”

"Under the current circumstances, it’s a stretch to conclude that good data is reassuring and therefore bullish for risk assets and currencies (bearish dollar),” they add. "We assume that a 30K-70K employment gain should not move the dial and it’s where oil and natural gas prices close the week that we think will govern the price action."

Eren Sengezer, European Session Lead Analyst at FXStreet, offers a brief technical outlook for EUR/USD:

“There is a clear bearish tilt in EUR/USD’s short-term outlook. The pair made a daily close below the 200-day Simple Moving Average (SMA) for the first time in a year and the Relative Strength Index (RSI) dropped below 40.”

“1.1500 (static level, round level) aligns as first significant support ahead of 1.1400 (static level, round level) and 1.1300-1.1290 (round level, static level). On the upside, a strong resistance area seems to have formed at 1.1670-1.1700 (200-day SMA, 100-day SMA). The pair would need to clear that hurdle and stabilize to attract technical buyers. In this case, the 50-day SMA could act as the next resistance at 1.1770.”

• The Oil price extends the advance to neat $82.80 as Qatar’s Kaabi warns of serious oil supply concerns.
• Qatar’s Kaabi said that Middle East conflicts could drive ‌oil to $150 a barrel.
• Higher oil prices are expected to prompt inflationary pressures across the globe.

West Texas Intermediate (WTI), futures on NYMEX, surges to near $82.80 during the European trading session on Friday, the highest level seen since July 2024. The oil price has extended the advance after Qatar’s Energy Minister Saad al-Kaabi warned that the ongoing war in the Middle East, which involves the United States (US), Israel, and Iran, could drive ‌oil to $150 a barrel, Financial Times (FT) reported.

Saad al-Kaabi expressed concerns in the interview that oil producers in the Gulf countries would declare force majeure, a situation that free parties from liability in case of an unforeseeable event, and suspend supply if hostilities continue. Kaabi added that even if the ​war ended immediately it would take ​Qatar "weeks to months" to return to a normal cycle ‌of ⁠deliveries.

Earlier this week, Qatar’s largest Liquified Natural Gas (LNG) plant, Ras Laffan facility, was forced to stop production after it was hit by an Iranian drone.

Fears of oil supply shortage has strengthened the oil price, and are further likely to prompt supply-side inflation expectations in the entire world. Lately, traders have pared dovish expectations for global central bankers.

Meanwhile, the Iran conflict has entered in its seventh day and has been escalating as US President Donald Trump has expressed disapproval to Mojtaba Khamenei for the succession of Supreme Leader Ayatollah Ali Khamenei, Axios reported. Trump has shown willingness to involve in Iran’s diplomacy for the appointment of new Supreme Leader.

In the US, investors will focus on the Nonfarm Payrolls (NFP) data for February, which will be published at 13:30 GMT. Investors will pay close attention to the US NFP data to get fresh cues on the Federal Reserve’s (Fed) monetary policy outlook.

Qatar’s Energy Minister Saad al-Kaabi said in an interview with the Financial Times (FT) published on Friday that all Gulf energy producers to shut ​down exports within weeks amid the ongoing war in the Middle East, which involves the United States (US), Israel, and Iran.

Saad al-Kaabi added that the closure of oil facilities could drive ‌oil to $150 a barrel. He further added that Qatar would need “weeks to months" to return to a normal cycle ‌of ⁠deliveries, even if the war stops immediately.

Market reaction

The oil price appears to be reacting positively to comments from Qatar's Kaabi. As of writing, WTI US oil trades almost 5% highert to near $82.80, the highest level seen in over 19 months.

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