Daily Forex News By XtreamForex
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EUR/GBP edges higher near 0.8650 ahead of BoE and ECB policy decisions
The EUR/GBP pair trades modestly higher around the 0.8650 level during the late Asian session on Thursday. The uptick comes as the Pound Sterling underperforms, with traders remaining cautious ahead of the Bank of England’s (BoE) monetary policy announcement scheduled for 12:00 GMT.
The BoE is widely expected to keep interest rates unchanged at 3.75% following a rate cut at its previous meeting. Policymakers had earlier signaled that monetary policy would continue on a “gradual downward path.” As a result, market participants will closely analyze the policy statement and Governor Andrew Bailey’s press conference for clearer guidance on the future interest rate outlook.
The UK central bank is likely to maintain its stance on gradual easing, citing subdued labor market conditions and expectations that inflation will return to the 2% target in the second quarter of this year. However, recent data showed that Consumer Price Index (CPI) inflation picked up in December after easing in October and November, adding a layer of uncertainty to the outlook.
Meanwhile, the Euro remains broadly stable ahead of the European Central Bank’s (ECB) interest rate decision at 13:15 GMT. The ECB is also expected to hold rates steady, with officials emphasizing that policy adjustments would only be warranted in the event of a significant shift in inflation or employment trends.
Supporting the cautious tone, Eurozone preliminary Harmonized Index of Consumer Prices (HICP) inflation eased to 1.7% year-on-year in January, in line with expectations, down from 1.9% in December.
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EUR/GBP edges higher near 0.8650 ahead of BoE and ECB policy decisions
The EUR/GBP pair trades modestly higher around the 0.8650 level during the late Asian session on Thursday. The uptick comes as the Pound Sterling underperforms, with traders remaining cautious ahead of the Bank of England’s (BoE) monetary policy announcement scheduled for 12:00 GMT.
The BoE is widely expected to keep interest rates unchanged at 3.75% following a rate cut at its previous meeting. Policymakers had earlier signaled that monetary policy would continue on a “gradual downward path.” As a result, market participants will closely analyze the policy statement and Governor Andrew Bailey’s press conference for clearer guidance on the future interest rate outlook.
The UK central bank is likely to maintain its stance on gradual easing, citing subdued labor market conditions and expectations that inflation will return to the 2% target in the second quarter of this year. However, recent data showed that Consumer Price Index (CPI) inflation picked up in December after easing in October and November, adding a layer of uncertainty to the outlook.
Meanwhile, the Euro remains broadly stable ahead of the European Central Bank’s (ECB) interest rate decision at 13:15 GMT. The ECB is also expected to hold rates steady, with officials emphasizing that policy adjustments would only be warranted in the event of a significant shift in inflation or employment trends.
Supporting the cautious tone, Eurozone preliminary Harmonized Index of Consumer Prices (HICP) inflation eased to 1.7% year-on-year in January, in line with expectations, down from 1.9% in December.
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Australian Dollar stays under pressure amid cautious market mood
The Australian Dollar (AUD) extended its losses against the US Dollar (USD) for a third consecutive session on Friday, as broad risk aversion weighed on global markets. The risk-sensitive, commodity-linked AUD came under selling pressure after a sharp decline in global equities, driven largely by a tech-led sell-off and renewed concerns over heavy investment in artificial intelligence, which dented overall investor confidence.
Adding to the downside, Reserve Bank of Australia (RBA) Governor Michele Bullock stated that the central bank lifted the Official Cash Rate (OCR) because the economy is more capacity-constrained than previously assessed, requiring tighter monetary policy. Bullock emphasized that demand growth must be restrained unless supply capacity improves at a faster pace.
Meanwhile, Australia’s Trade Balance data released on Thursday showed that the trade surplus widened to AUD 3,373 million in December 2025, up from a downwardly revised AUD 2,597 million in November and slightly above market expectations of AUD 3,300 million. Exports rose 1.0% month-on-month (MoM), recovering from an upwardly revised 4.0% fall in November, supported mainly by metal ores and minerals. Imports declined by 0.8% MoM, a sharper drop than the revised 0.2% contraction previously recorded, largely due to weaker demand for other merchandise goods.
Earlier this week, the RBA raised the OCR by 25 basis points to 3.85%, citing stronger-than-expected economic growth and persistently high inflation. As the tightening cycle continues, markets now assign an 80% probability to another rate hike in May and are pricing in around 40 basis points of additional tightening over the remainder of the year.
US Dollar eases after recent gains
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, edged lower after two straight sessions of gains and was hovering near the 97.90 level at the time of writing.
Market participants are awaiting the preliminary February reading of the Michigan Consumer Sentiment Index, scheduled for release later in the North American session.
The US Dollar softened as recent labor market data pointed to easing employment conditions, reinforcing expectations that the Federal Reserve may adopt a more dovish stance. Markets are currently pricing in two interest-rate cuts this year, with the first potentially beginning in June, followed by another in September.
According to the CME FedWatch Tool, there is nearly a 77.3% probability that the Federal Reserve will keep interest rates unchanged at its March policy meeting, with expectations building for an initial rate cut in June.
Data from the US Department of Labor showed Initial Jobless Claims rose to 231,000 for the week ending January 31, exceeding both market estimates of 212,000 and the prior reading of 209,000. Separately, ADP data revealed that private sector payrolls increased by just 22,000 in January, falling well short of expectations for 48,000 and below the previous 37,000 figure (revised from 41,000).
Fed Governor Lisa Cook noted that she would not support further rate cuts without clearer signs that inflation is easing, highlighting greater concern over stalled disinflation than weakness in the labor market.
Investors also assessed the potential impact of Kevin Warsh’s nomination as Federal Reserve Chair. Warsh is seen as favoring a smaller balance sheet and a more cautious approach to rate cuts. US President Donald Trump added that he would not have nominated Warsh if he supported rate hikes, stating that interest rates remain “way too high,” and suggesting that rate reductions are likely as the US economy strengthens.
China and Australia data provide mixed signals for AUD
China’s Services Purchasing Managers’ Index (PMI) rose to 52.3 in January from 52.0 in December, beating market expectations of 51.8. Given China’s role as Australia’s largest trading partner, stronger Chinese economic activity can influence the outlook for the Australian Dollar.
In Australia, S&P Global’s Composite PMI climbed sharply to 55.7 in January from 51.0 in December, marking the strongest expansion in 45 months. The Services PMI rose to 56.3 from 51.1, its highest level since February 2022, exceeding the flash estimate of 56.0 and remaining well above the 50.0 expansion threshold. This extended the run of growth in the services sector to two consecutive years.
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EUR/USD moves higher above 1.1900 ahead of US January NFP report
The EUR/USD pair advances toward 1.1915 in early European trading on Wednesday, supported by a softer US Dollar. Investors are likely to adopt a cautious stance later in the session as they await the delayed US January employment report, which could shape expectations around Federal Reserve policy.
Disappointing US Retail Sales figures weighed on the Greenback and provided support to the pair. According to data released by the US Census Bureau on Tuesday, Retail Sales were flat at $735 billion in December, following a 0.6% increase in November. The result fell short of market expectations for a 0.4% rise. On an annual basis, Retail Sales grew by 2.4% in December, down from 3.3% previously.
Cleveland Fed President Beth Hammack stated that interest rates may remain unchanged for an extended period as policymakers assess incoming data. Dallas Fed President Lorie Logan added that while inflation is expected to ease further, she would require clear signs of significant weakness in the labor market before backing additional rate cuts.
Economists forecast that US Nonfarm Payrolls increased by 70,000 in January, with the Unemployment Rate seen holding steady at 4.4%. Stronger-than-expected labor market data could lend fresh support to the US Dollar against the euro in the near term.
In the Eurozone, the European Central Bank kept its key interest rate unchanged at 2.0% for the fifth consecutive meeting last week, in line with expectations. During her press conference, ECB President Christine Lagarde emphasized that the central bank would continue to rely on incoming data and make decisions on a meeting-by-meeting basis, without committing to a specific rate trajectory. A large majority of economists surveyed by Reuters in January expect the ECB to maintain current interest rates throughout the remainder of 2026.
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EUR/USD weakens as US jobs data trims Fed rate cut bets
The EUR/USD pair trades in negative territory for the third consecutive day near 1.1860 during the early European session on Thursday. Traders will keep an eye on the US weekly Initial Jobless Claims data. On Friday, the attention will shift to the US Consumer Price Index (CPI) inflation report.
The Greenback strengthens against the Euro (EUR) as traders trim bets for a March Federal Reserve (Fed) rate cut after the upbeat US jobs data. The Bureau of Labor Statistics revealed on Wednesday that the US Nonfarm Payrolls (NFP) climbed by 130,000 in January, stronger than the expectation of 70,000. The Unemployment Rate fell to 4.3% in January from 4.4% in December, better than the projection of 4.4%.
According to the CME Fed Watch tool, financial markets are now pricing in nearly a 94% probability that the Fed will leave rates unchanged at its next meeting, up from 80% from the previous day.
Across the pond, the growing acceptance that the European Central Bank (ECB) would likely hold interest rates steady for the rest of the year could support the shared currency. ECB President Christine Lagarde said during the press conference that the central bank would maintain its data-dependent and “meeting-by-meeting approach” and would not be “recommitting to a particular rate path.
Around 85% of economists surveyed by Reuters in their January poll showed the ECB would leave the interest rates unchanged over the rest of 2026.
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EUR/GBP slips below 0.8750 after stronger UK Retail Sales
The EUR/GBP pair edged lower to around 0.8735 in early European trading on Friday. The Pound gained against the Euro following better-than-expected UK economic figures. Later in the day, markets will focus on the preliminary Purchasing Managers’ Index (PMI) reports from the Eurozone, Germany, and the United Kingdom.
Figures released by the Office for National Statistics (ONS) showed UK Retail Sales rose 1.8% month-on-month in January, up from 0.4% previously and well above the 0.2% increase economists had predicted. On a yearly basis, sales increased 4.5%, compared with 1.9% previously (revised from 2.5%), also beating the 2.8% forecast. The stronger data supported the Pound, drawing immediate buying interest.
Meanwhile, European Central Bank President Christine Lagarde said she intends to remain in her role until October 2027, according to the Wall Street Journal. She did not directly address speculation about a possible early exit but mentioned the World Economic Forum as one of several options she may consider after leaving the ECB.
Investors now await the flash PMI readings from the Eurozone and Germany. A stronger set of figures could help the Euro recover some ground against the Pound in the short term.
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NZD/USD trims early advance while the US Dollar stays weak
The NZD/USD pair pulled back from its intraday highs during Monday’s early European session after meeting resistance near the key 0.6000 level. Even so, the pair remains slightly positive, trading around 0.5980, supported by a softer US Dollar amid fresh uncertainty surrounding US trade policy.
At the time of writing, the US Dollar Index (DXY), which measures the Greenback against six major currencies, has fallen about 0.35% to roughly 97.45.
The Dollar lost appeal after the US Supreme Court ruled President Donald Trump’s tariff policy unlawful. In response, Trump proposed a 15% global tariff plan to counter the impact of the ruling, increasing policy uncertainty.
Additional pressure on the Dollar comes from weak economic data. Fourth-quarter GDP figures disappointed, and the S&P Global Purchasing Managers’ Index (PMI) for February showed slower-than-expected growth, reinforcing concerns about economic momentum.
On the policy side, investors are waiting for comments from several Federal Reserve officials scheduled this week. Market expectations currently suggest the Fed is likely to keep interest rates unchanged at both the March and April meetings, according to the CME Fed Watch outlook.
Meanwhile in New Zealand, fourth-quarter Retail Sales were better than forecasts. Sales rose 0.9%, beating the 0.6% estimate, though still below the previous 1.9% increase.
Looking ahead, traders will also focus on the People’s Bank of China’s monetary policy decision on Tuesday, which could influence the New Zealand Dollar given China’s importance as New Zealand’s key trading partner.
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EUR/USD rises toward 1.1800 as trade tensions pressure the US Dollar
The EUR/USD pair trades firmer near 1.1795 in early Asian trading on Tuesday, supported by a softer US Dollar (USD). Ongoing uncertainty surrounding US trade tariffs is weighing on the Greenback and helping the Euro (EUR) gain ground. Meanwhile, markets are also watching the US January Producer Price Index (PPI) report due later this week.
On Friday, the US Supreme Court invalidated several tariffs previously introduced by President Donald Trump. Despite the ruling, the administration signaled it will continue its trade stance and plans to introduce a fresh 15% tariff on Saturday.
In response, the European Union has taken a cautious approach. The European Parliament’s trade leadership indicated the EU may pause ratification of a trade agreement with the United States until greater clarity on Washington’s trade policy is provided. The renewed uncertainty around trade relations has pressured the USD and supported the currency pair.
European Central Bank (ECB) President Christine Lagarde stated Monday that policymakers must remain flexible when setting interest rates. She added that decisions will continue to be made on a meeting-by-meeting basis, noting that risks to the economic outlook currently appear balanced.
Attention now turns to the upcoming US PPI data, which could shape expectations for future Federal Reserve policy. Economists expect January producer inflation to ease compared with the prior month. However, a stronger-than-forecast reading could lend short-term support to the US Dollar.
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GBP/USD
The Manufacturing Production data looks promising for the Pound, but Brexit uncertainty and the upcoming Parliamentary talks definitely keep the upside limited. It feels like the pair is just waiting for a clear catalyst to break the current range.
AUD/USD
Retail sales gave the Aussie a nice boost, but finding acceptance above 0.72 is proving to be a real challenge. With the USD showing signs of a recovery rally and gold prices shifting, we might see some downward pressure toward those support levels soon.
NZD/USD
Probing that long-term trendline and the 100-MA on the 4-hour chart makes this a critical spot for the Kiwi. Building consents data adds a bit of fundamental support, but the resistance at 0.6786 is the one to watch for a potential breakout.
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GBP/USD Holds Firm Above 1.3500 After Trump’s State of the Union Address
The GBP/USD pair extends its advance for a fourth straight session, trading near 1.3510 during Wednesday’s Asian session. The Pound Sterling remains supported as the US Dollar stays under pressure following US President Donald Trump’s first State of the Union address of his second term before Congress.
In his speech, Trump claimed his administration had delivered a significant economic turnaround, pointing to easing inflation and a stronger economic backdrop. He also emphasized efforts to combat illegal immigration and restrict fentanyl trafficking across US borders. However, Trump signaled the possibility of raising tariffs on nations that challenge existing trade arrangements, particularly after the Supreme Court blocked several of his broad global tariff measures.
Despite the recent softness in the US Dollar, expectations that the Federal Reserve may maintain current interest rates for an extended period could limit further downside. Boston Fed President Susan Collins stated that keeping rates within the current range remains appropriate for now. Similarly, Richmond Fed President Thomas Barkin said policy settings are well-positioned to address economic uncertainties.
In the UK, economic data painted a weaker picture of the retail sector. The Confederation of British Industry (CBI) reported that its Retail Sales Balance declined sharply to -43 in February from -17 in January, falling short of expectations. Retail activity has been under strain since mid-2023, with February marking a notable drop. Businesses described seasonal trading as disappointing and anticipate continued pressure due to subdued consumer demand.
Meanwhile, Bank of England Governor Andrew Bailey told the Treasury Committee that a potential rate cut in March remains under consideration. He highlighted that services inflation stood at 4.4% in January, above the Bank’s forecast of 4.1%. Chief Economist Huw Pill also urged caution, noting that policymakers should not be overly encouraged by headline inflation moving closer to the 2% target.
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Canadian Dollar stays firm above 1.3650 as US tariff worries weigh on USD
The USD/CAD pair trades slightly lower near 1.3670 during Thursday’s early European session. The US Dollar weakens against the Canadian Dollar as uncertainty around US economic policy and renewed concerns over higher import tariffs pressure the Greenback. Investors are now awaiting Canada’s Gross Domestic Product (GDP) figures and the US Producer Price Index (PPI) report due on Friday.
On Wednesday, US Trade Representative Jamieson Greer said that President Donald Trump is considering increasing tariffs to 15% or more on several countries in the coming days. The authority would apply for up to 150 days unless Congress grants an extension. These remarks have reduced confidence in the US Dollar and encouraged selling pressure.
Ongoing geopolitical tensions may also support crude oil prices, which typically benefits the Canadian Dollar. Canada is a major oil exporter, so stronger oil prices usually strengthen the CAD. Traders are also watching developments in the US-Iran nuclear discussions, as officials from both countries are scheduled to meet in Geneva for another round of indirect talks.
Market attention now shifts to the US January PPI data. Economists expect producer inflation to rise 0.3% month-on-month, slower than December’s 0.5% increase. On a yearly basis, PPI is forecast to grow 2.6% compared to the previous 3.0%. However, a stronger-than-expected reading could reduce expectations of future rate cuts and provide short-term support to the US Dollar against the Canadian Dollar.
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EUR/USD edges higher near 1.1800 ahead of Germany’s flash inflation release
The EUR/USD pair moves slightly higher, trading around 1.1810 during the late Asian session on Friday, as investors await Germany’s preliminary inflation figures for February, including data from its major states.
Germany’s flash Harmonized Index of Consumer Prices (HICP) is projected to rise 0.5% month-on-month, recovering from a 0.1% decline in January. On an annual basis, inflation is expected to hold steady at 2.1%.
However, the German inflation reading is unlikely to significantly alter expectations for the Eurozone’s interest rate path. European Central Bank (ECB) President Christine Lagarde stated on Thursday, during her address to the European Parliament’s Committee on Economic and Monetary Affairs (ECON), that she remains confident inflation will stabilize around the ECB’s 2% target in the near term.
Regarding policy guidance, Lagarde emphasized that interest rate decisions will depend on the evolving inflation outlook and associated risks. She reiterated that the ECB will maintain a data-dependent, meeting-by-meeting approach when determining its monetary policy stance.
On the other side, the US Dollar softens slightly ahead of the release of the US Producer Price Index (PPI) data for January, scheduled for 13:30 GMT. The US Dollar Index (DXY), which measures the Greenback against six major currencies, is trading 0.1% lower near 97.65 at the time of writing.
Market participants will closely analyze the PPI report for fresh insights into inflation trends. Producer price data could meaningfully influence expectations for the Federal Reserve’s policy direction, especially as several Fed officials have recently supported keeping interest rates steady due to persistent inflation risks.
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