Market Insight 20-02-2026

• Written by: Ian Morley
• 20/02/2026

Daily Currency Market Update – Friday, 20 February 2026

Market Overview

The US Dollar holds firm near 98.00, its strongest level in almost a month, as geopolitical tensions and hawkish FOMC commentary continue to underpin safe‑haven demand. Markets remain cautious ahead of a heavy data slate, with flash PMIs from major economies and the first estimate of US Q4 GDP — expected at 3% annualised — alongside the December PCE Price Index.

Concerns over a potential US–Iran military confrontation remain elevated after President Trump warned that Iran must “make a deal or bad things will happen.” Iran has signalled it does not seek war but will respond decisively to any US action. Despite the rhetoric, US equity futures are marginally higher this morning.

EUR/USD trades near 1.1750, GBP/USD remains under pressure below 1.3450, and AUD/USD softens after weaker PMI data. USD/CAD edges lower as oil prices rise, while USD/CHF holds firm above 0.7750.

GBP/EUR

GBP/EUR ~1.1440

The cross holds steady as strong UK Retail Sales offset broader GBP weakness.

Drivers

• UK Retail Sales surged 1.8% MoM, far above the 0.2% forecast.
• Annual sales rose 4.5%, signalling resilient consumer spending.
• GBP finds support after three days of declines.
• ECB President Lagarde dismissed rumours of an early resignation, reaffirming her intention to serve until 2027.
• Eurozone flash PMIs due later today will be key for direction.

Outlook: GBP/EUR likely to remain range‑bound unless Eurozone PMIs surprise significantly.

GBP/USD

GBP/USD ~1.3460

Sterling recovers early losses after strong UK Retail Sales but remains fragile.

Drivers

• GBP/USD rebounds from a four‑week low after Retail Sales beat expectations.
• UK Composite PMI expected to ease slightly to 53.4.
• USD remains firm ahead of US GDP and PMIs.
• Geopolitical tensions continue to support safe‑haven USD demand.
• FOMC Minutes reinforced the possibility of further tightening if inflation stalls.

Outlook: GBP/USD remains vulnerable; upside likely capped near 1.3500–1.3520 unless US data disappoints.

EUR/USD

EUR/USD ~1.1770

The Euro trades flat as leadership uncertainty and firm USD sentiment limit gains.

Drivers

• EUR/USD stabilises after Thursday’s decline but remains near weekly lows.
• Lagarde succession speculation continues to weigh on sentiment despite ECB denials.
• FOMC Minutes showed policymakers are open to further hikes if inflation remains sticky.
• Eurozone PMIs expected to show continued expansion.

Outlook: EUR/USD remains pressured; a weak US GDP/PCE print would be needed to lift the pair meaningfully.

AUD/USD

AUD/USD ~0.7040

The Australian Dollar softens after weaker PMI data and firm USD demand.

Drivers

• Australia’s Composite PMI fell sharply to 52.0 from 55.7.
• Services PMI eased to 52.2, Manufacturing to 51.5.
• AUD pressured by broad USD strength after lower US jobless claims (206K).
• Markets await US GDP and PCE for direction.

Outlook: AUD/USD remains capped below 0.7080; a soft US data print could offer temporary relief.

USD/CAD

USD/CAD ~1.3695

The pair edges lower as rising oil prices support CAD.

Drivers

• Oil prices rebound amid escalating US–Iran tensions.
• Canada Retail Sales due today; US GDP/PCE also in focus.
• Softer Canada CPI (2.3% YoY) reinforces expectations of further BoC cuts.
• USD supported by hawkish FOMC Minutes and strong jobless claims.

Outlook: USD/CAD remains supported above 1.3650; a break below this level requires weak US data.

USD/CHF

USD/CHF ~0.7760

The Dollar holds firm despite safe‑haven CHF demand.

Drivers

• USD/CHF extends its winning streak to five sessions.
• CHF supported by geopolitical tensions and stalled US–Iran talks.
• SNB expected to keep rates steady as inflation remains at 0.1%.
• USD supported by hawkish FOMC Minutes and strong jobless claims.

Outlook: USD/CHF remains firm but capped by safe‑haven flows; US GDP/PCE will determine next direction.

Final Summary

The US Dollar holds near monthly highs as geopolitical tensions and hawkish FOMC commentary support safe‑haven demand. Sterling stabilises after strong UK Retail Sales but remains fragile ahead of PMIs. The Euro trades flat amid leadership uncertainty and firm USD sentiment. The Australian Dollar softens after weaker PMI data, while CAD benefits from rising oil prices. CHF remains supported by safe‑haven flows, though USD/CHF holds firm. Today’s flash PMIs, US GDP, and PCE inflation will set the tone for FX markets into the weekend.