The euro is struggling to hold above its 50‑day moving average as the dollar regains some strength, supported by elevated US yields and expectations that the Federal Reserve will keep rates higher for longer. While Germany’s February IFO survey showed modest improvement and early signs of stabilization, it points to a slow and fragile recovery rather than a strong rebound, offering only limited support for the euro. At the same time, ECB President Lagarde signaled no urgency to adjust rates and emphasized a cautious, data‑dependent approach, while softer euro‑area inflation trends and weakening external demand suggest risks remain tilted toward future monetary easing, which could continue to weigh on the euro near term.

USDJPY has risen to 155.18, moving back above its 100-day moving average and consolidating near 155 as it attempts to resume its broader uptrend, with resistance seen near the 50-day moving average around 156. Former BOJ board member Makoto Sakurai said the central bank could raise rates as early as March if yen weakness continues, noting that rate hikes are more effective than direct intervention in supporting the currency. Persistent inflation pressures, highlighted by steady services PPI and supported by potential wage gains, reinforce the case for further tightening, though the BOJ is expected to proceed gradually to avoid putting strain on banks and smaller businesses.

The Australian dollar is holding steady despite a stronger US dollar, with upside potential toward the 0.7150 area as long as support above 0.7000 holds. Markets are now focused on Australia’s January CPI release, which will help determine whether the RBA’s recent rate hike was a one-off or the start of a new tightening cycle. While inflation is expected to ease slightly, core price pressures are likely to remain above target, keeping the RBA cautious and maintaining the possibility of another rate hike around May if inflation proves persistent. In the near term, the Aussie could move higher if inflation data support further tightening expectations, though geopolitical tensions and weaker risk sentiment are limiting gains for now.