The euro is up slightly but remains under pressure near its 50-day average, weighed down by US tariff threats, trade uncertainty, and geopolitical tensions, while the dollar continues to draw support from elevated US yields and expectations the Fed will keep rates higher for longer. Germany’s March GfK consumer confidence is expected to improve modestly, helped by stronger income expectations and easing inflation, though sentiment remains weak and gains are likely to be limited amid economic and geopolitical uncertainty. Meanwhile, Chancellor Friedrich Merz is reshaping Germany’s China strategy toward a pragmatic “de-risking” approach—seeking fair, rules-based trade and reduced dependencies while maintaining cooperation and positioning Europe’s relationship with China as balanced, resilient, and mutually respectful.

The yen is holding steady, but recent political developments point to continued near-term weakness. Prime Minister Takaichi’s nomination of reflation-leaning academics to the BOJ board and her cautious stance on further rate hikes have lowered expectations for near-term tightening, reinforcing the view that Japan’s real yields will remain deeply negative. Combined with soft demand from China and ongoing US–Japan rate differentials, this backdrop favors dollar strength, with USDJPY likely biased higher in the coming weeks, though excessive yen weakness could trigger verbal intervention. Meanwhile, steady services inflation supports gradual policy normalization over time but offers no urgency for the BOJ to accelerate hikes.

The Australian dollar has been bid up after stronger-than-expected January CPI reinforced the view that the RBA may still tighten policy this year. Headline CPI rose 0.4% MoM, bringing the annual rate to 3.8%, above expectations and still well above the RBA’s 2–3% target, highlighting persistent inflation, especially in services. Markets now see a modest chance of another rate hike as soon as March, with slightly higher expectations for further tightening into May. The RBA expects inflation to peak around mid-2026 before gradually easing, though strong demand, higher travel and fuel costs, and ongoing labor market pressures continue to keep price growth elevated for now.

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.

Euro-area data and market pricing suggest the euro remains mildly constructive but vulnerable in the near term, with downside risks increasingly driven by geopolitics and US trade policy rather than domestic fundamentals. Rising US-Iran tensions, elevated war risks in Europe, and renewed tariff uncertainty have strengthened the dollar’s safe-haven appeal, while options markets show growing demand for downside euro protection. Many analysts warn EURUSD could drift lower toward the mid-1.16 area if geopolitical tensions or trade pressures intensify, with rallies likely capped unless external risks ease. Meanwhile, upcoming euro-area data—particularly Germany’s IFO survey—is expected to show only modest improvement, reinforcing the view of a fragile, sideways economy rather than a clear recovery.

USDJPY remains supported above the late-January low after pulling back from its early-February peak, with price now consolidating around 155. Prime Minister Sanae Takaichi’s first major policy speech signaled a shift away from austerity toward more expansionary, investment-led fiscal policy, though framed carefully to reassure markets about debt sustainability and currency stability. While the outlook is seen as mildly negative for the yen over time due to looser fiscal conditions, her emphasis on stability and caution against excessive weakness may limit downside risks. Meanwhile, former BOJ official Makoto Sakurai noted the central bank could raise rates as early as March if yen depreciation intensifies, with gradual tightening expected longer term as policymakers balance inflation risks against financial stability concerns. Key upcoming data include Tokyo CPI and Retail Sales, which could influence policy expectations.

The Australian Dollar continues to find strong support above the 9 February low, with consistent buying seen, leaving room for a rebound toward the 0.7147–0.7158 area if this base holds. Australia’s labor market remains tight, with unemployment at 4.1%, solid job gains, and firm wage growth, reinforcing concerns that inflation pressures will persist. Combined with ongoing fiscal support and expectations that the RBA may raise rates further—potentially keeping them above those in the U.S.—the policy outlook favors the AUD, especially as USD sentiment has softened amid tariff-related uncertainty and shifting Fed expectations. Near-term direction will hinge on upcoming Australian inflation data and guidance from the RBA Governor, both critical for shaping expectations around additional tightening or a pause.

The euro enters late February under pressure, as fading momentum and political uncertainty offset a still-stable economic backdrop. The ECB kept rates unchanged and maintained a cautious, data-dependent stance as inflation eases and growth remains modest but supported by strong services, government spending, and resilient domestic demand, even as exports face headwinds. Markets still favor buying dips, though positioning appears stretched and vulnerable to periods of dollar strength. Meanwhile, ECB President Christine Lagarde emphasized the importance of preserving and reforming the global rules-based system, warning against fragmentation into rival blocs. Upcoming PMI and wage data, particularly from Germany, are expected to show gradual improvement led by services and a stabilizing manufacturing sector, reinforcing the view of a fragile but ongoing recovery.

USDJPY has rebounded after pulling back from its February high, now recovering toward the 50-day moving average near 156. Japan’s latest CPI data showed headline and core inflation easing due to temporary factors, but underlying price pressures remain firm, reinforcing expectations that the Bank of Japan will continue normalizing policy gradually rather than rushing into near-term rate hikes. While softer inflation reduces immediate support for the yen and helps keep USDJPY elevated, persistent underlying inflation and the BOJ’s sensitivity to currency weakness leave room for yen strength if price pressures pick up or depreciation intensifies. Meanwhile, stronger PMI readings point to improving business momentum, supporting confidence as the government prepares multi-year fiscal initiatives aimed at boosting long-term investment and growth.

The Australian dollar has held recent dips comfortably above the 9 February low of 0.7007, supported by still-tight domestic fundamentals. Strong labor data—including low unemployment, solid job gains, and firm wage growth—reinforce the view that the economy remains resilient and inflation risks persist, keeping the RBA biased toward further tightening or maintaining restrictive policy. Although recent PMI data point to slowing but still-positive growth alongside renewed price pressures, expectations for at least one more RBA hike—contrasted with a Fed closer to easing—continue to underpin the AUD, encouraging investors to buy dips rather than expect sustained downside.

The euro slipped back below 1.18 after hawkish Fed minutes but remains supported above its 50-day moving average, suggesting only a modest near-term softening rather than a shift in trend. The euro faces some headwinds from increasingly dovish ECB signals, elevated positioning, and already strong valuation levels, which may limit upside for now. Still, many analysts view recent weakness as a correction within a broader 2026 uptrend driven mainly by expected dollar softness, with ECB policy likely to remain steady and rate differentials relatively stable in the near term.

The yen has weakened due to hawkish Fed minutes, rising US yields, and firmer oil prices, which increase Japan’s import costs. However, the medium-term outlook still leans modestly supportive for the yen, as expectations of gradual BOJ tightening, narrowing US-Japan rate differentials, and crowded short-yen positioning create conditions for potential strength, especially on dollar pullbacks. Fiscal concerns and JGB volatility could cause intermittent weakness, but improving capex data, policy normalization expectations, and closer US-Japan coordination reinforce a constructive bias for the yen overall, with near-term volatility likely around key policy developments and levels in USDJPY.

The Australian dollar has held onto its recent gains near 0.7100 and remains February’s top-performing G10 currency, though stretched positioning suggests limited room for further near-term upside. Analysts expect any pullbacks driven by weaker data or risk aversion to be temporary, with medium-term support coming from the RBA’s relatively hawkish stance as strong labor costs and still-tight employment conditions keep inflation risks elevated. Recent labor data reinforced this view, showing solid full-time job growth and steady unemployment, but signs of slowing employment momentum point to gradual cooling later in 2026. Overall, the AUD remains supported in the short term by yield differentials and policy divergence, though future gains may depend on whether economic strength can be sustained.

The euro is under mild pressure after a weaker-than-expected German ZEW survey weighed on sentiment. ECB Vice President-designate Vujčić noted the euro has an opportunity to expand its global role as confidence in the dollar is reassessed, though structural limitations remain. Near term, the euro’s direction will be driven mainly by USD moves and incoming eurozone inflation data, including France’s final January CPI release later today.

USDJPY is trying to reverse Tuesday’s modest dip but still trading near last week’s roughly two-week low of 152.24. Japan’s January trade data showed exports jumping 16.8% year-over-year—the strongest increase in more than three years—driven by solid demand from Asia and Europe and some pre-Lunar New Year shipments, while weaker imports helped narrow the trade deficit. Although the strong export performance points to improving growth momentum, USD strength and higher US yields remain the key drivers. Continued gains in US yields could push USDJPY back toward the mid-154s, while a shift toward risk aversion or changing BoJ expectations would be needed to drive the pair back toward 152.

The Australian dollar is trading with a softer tone today. Earlier, RBA meeting minutes struck a more cautious tone, highlighting a data-dependent approach and balanced risks, even as officials acknowledged rising concerns around inflation and the labor market before the last rate hike. Despite the recent dip, the currency remains up 6.2% year-to-date, supported by the RBA’s hawkish stance and ongoing focus on wage pressures, especially in services. Attention now turns to Thursday’s employment report, which is expected to show a 20,000 increase in jobs and a slight rise in unemployment to 4.2%.

The euro edged lower and is on track for a sixth straight day of losses, gradually approaching—but not yet decisively testing—the 50-day moving average near 1.1770. ECB President Lagarde struck a constructive tone, suggesting US trade tensions could accelerate European reforms, while the ECB’s plan to extend repo lines to foreign central banks from Q3 2026 reinforces efforts to boost euro liquidity and strengthen its global standing. Today’s German final January CPI and February ZEW expectations survey could provide additional near-term direction.

The pair is tracking lower today, giving back part of Monday’s roughly 0.5% rebound that snapped a five-day losing streak, and remains close to last week’s two-week low of 152.24. The yen has steadied amid renewed attention on domestic fiscal policy coordination and comments from former BOJ board member Saiji Adachi pointing to a possible April rate hike. Although Governor Ueda said no explicit rate request was made in talks with PM Takaichi, markets remain sensitive to gradual signals of policy normalization.

The Australian dollar slipped after the RBA minutes reinforced a data-dependent stance, stressing that the February rate hike to 3.85% was needed due to persistent inflation and a tight labor market, while offering little clarity on the near-term policy path. Although the lack of new hawkish signals limited immediate upside, the RBA’s firm tone and resilient domestic data should continue to support the AUD. Markets assign low odds of a March hike but expect a strong chance of further tightening later this year, with upcoming employment data—forecast to show solid job gains and a slight rise in unemployment—likely to shape expectations.

The Euro is steady after four straight days of losses, holding near the roughly four-year high of $1.2081 reached in late January. ECB President Lagarde struck an optimistic tone, emphasizing incentives over taxes and suggesting that US trade tensions could accelerate European reforms, while noting continued capital inflows into Europe. The ECB also announced plans to expand repo access to more central banks starting in Q3 2026, supporting euro liquidity and reinforcing its global role. Markets now turn to upcoming data, including Sweden’s January unemployment rate and Eurozone industrial production for December.

The pair is on track to snap a five-day losing streak, though it remains close to last Thursday’s two-week low of 152.24. Japan’s preliminary fourth-quarter GDP disappointed due to weak business spending, while the GDP deflator held firm at 3.4% year-over-year, pointing to ongoing inflation pressures. BoJ member Tamura indicated the 2% inflation target could be achieved as soon as spring if wage growth continues, highlighting growing pressure on Governor Ueda to proceed with policy normalization. Overall, the medium-term outlook increasingly reflects gradual BoJ tightening alongside a less aggressively hawkish Federal Reserve.

The Aussie dollar is modestly higher, recovering some of Friday’s losses and holding near last week’s roughly three-year high of 0.7147. The currency remains supported by the RBA’s hawkish stance and solid domestic data, with markets pricing in about an 80% chance of a rate hike in May and a strong possibility of another later this year. Attention now turns to the upcoming RBA meeting minutes and Thursday’s jobs report, which will be key in shaping expectations for the policy outlook.

The euro edged slightly lower but stayed range-bound as markets weighed a steady dollar against a stable ECB outlook. ECB President Lagarde said inflation is in a “good place,” but strong US jobs data has capped euro upside, leaving US CPI as the next key catalyst—weak data could lift EURUSD above 1.1929, while a strong print risks a move toward 1.1766. In Europe, upcoming CPI, GDP, and trade data are expected to confirm steady growth and easing price pressures, with these releases, alongside US inflation, guiding near-term direction for the euro.

The pair is edging toward ending a four-day slide but is still down a nice amount on the week, as markets react positively to PM Takaichi’s fiscal agenda. Her decisive election win has boosted confidence in higher government spending and tax cuts, supporting growth expectations and giving the Bank of Japan more room to gradually normalize policy. At the same time, firm rhetoric from Japanese officials on curbing FX volatility has underpinned the yen, with a break below 152.10 opening the door to further gains—especially if US CPI comes in weaker than expected.

The Australian dollar is slightly lower, extending Thursday’s decline, but remains close to a 3.5-year high around 0.7150. The RBA struck a hawkish tone, with Governor Bullock signaling a willingness to raise rates again if inflation stays sticky, reinforced by a jump in inflation expectations to 5% in February. As a result, markets are increasingly pricing in a possible rate hike in May, pending upcoming inflation, jobs, and GDP data.

The euro is little changed after a two-day drop that pushed it below 1.1900, with price action still driven as much by the dollar as by euro-specific factors. While ECB President Lagarde struck a steady tone on the eurozone inflation outlook, sentiment remains weighed down by political uncertainty in France, Germany’s fiscal constraints, and reports that Bank of France Governor Villeroy de Galhau may step down earlier than expected. Attention now turns to speeches from ECB officials for policy clues, with markets pricing nearly 60 bps of rate cuts by year-end and a modest chance of a March move.

The yen is modestly stronger against the dollar, with USDJPY hovering just above a fresh two-week low near 152.27, even after solid US labour data. The pair remains under pressure amid renewed verbal intervention from Japanese officials, optimism around firmer domestic growth following PM Takaichi’s election mandate, and the backdrop of gradually normalizing Bank of Japan policy. Meanwhile, Japan’s producer inflation slowed to 2.3% year-on-year in January—the weakest pace in 20 months—suggesting easing price pressures that could give the BoJ greater flexibility to adjust policy in the months ahead.

The Australian dollar is edging higher near a three-year high, supported by the RBA’s increasingly hawkish tone. Governor Michele Bullock reiterated that inflation in the “threes” is unacceptable and said rates could rise further if price pressures persist, echoing recent warnings from other RBA officials. With the cash rate now at 3.85% and economists expecting at least one more hike, inflation expectations climbing, and the labor market still tight, markets are focused on upcoming data and fresh commentary from Assistant Governor Sarah Hunter for clues on the next policy move.