• [gtranslate]

Market Insight 27-02-2026

  • Home
  • Market Insight 27-02-2026

Daily Currency Market Update – Friday, 27 February 2026

Market Overview

The US Dollar stabilises as risk appetite fades, with safe‑haven flows returning after a two‑day equity rally. The USD Index holds near 97.70, supported by softer equity futures and lingering geopolitical uncertainty despite reports of “significant progress” in US–Iran nuclear talks.

Attention turns to German CPI (flash) this morning, followed by US PPI and Canada Q4 GDP this afternoon — all capable of injecting fresh volatility into FX markets. Oil trades slightly firmer near $65.70, while equities drift lower in early European trade.

GBP/EUR

GBP/EUR ~1.1420

The cross drifts lower as UK political uncertainty intensifies.

Drivers

  • The Green Party’s victory in the Gorton & Denton by‑election marks a historic upset and a major blow to PM Starmer.
  • Analysts warn the result could trigger renewed leadership speculation and weigh on GBP.
  • BoE easing expectations remain elevated, with markets pricing a March or April rate cut.
  • German CPI (flash) due today; a downside surprise would strengthen expectations of ECB easing.
  • Eurozone inflation fell to 1.7% YoY, a 16‑month low.

Outlook: GBP/EUR remains pressured; direction hinges on German CPI and UK political fallout.

GBP/USD

GBP/USD ~1.3500

Sterling struggles to attract buyers as political risks and BoE easing bias dominate.

Drivers

  • GBP/USD unable to build on Thursday’s modest rebound from 1.3445.
  • UK political drama around the by‑election adds uncertainty.
  • BoE Governor Bailey reiterated that a March rate cut is an open question.
  • Fed minutes reduced expectations for aggressive US easing; some officials even discussed potential hikes.
  • USD supported by safe‑haven flows as risk sentiment deteriorates.

Outlook: GBP/USD remains vulnerable; US PPI later today will determine whether the pair retests weekly lows.

EUR/USD

EUR/USD ~1.1810

The Euro edges higher ahead of German inflation data.

Drivers

  • EUR/USD holds a positive bias despite subdued trading.
  • German HICP expected at 0.5% MoM, 2.1% YoY.
  • Lagarde reiterated confidence that Eurozone inflation will stabilise near 2%.
  • USD softens slightly ahead of PPI but remains supported by risk aversion.
  • Fed officials continue to emphasise caution on rate cuts.

Outlook: EUR/USD supported above 1.1800; a soft German CPI print could cap gains.

AUD/USD

AUD/USD ~0.7110

The Australian Dollar remains on the front foot as RBA tightening bets strengthen.

Drivers

  • AUD/USD trades near a two‑week high after hot Australian CPI earlier this week.
  • Markets price an 80% chance of a May RBA hike.
  • AUD supported by strong domestic inflation momentum.
  • Risk sentiment remains fragile due to geopolitical tensions, limiting upside.
  • USD remains firm overall, but AUD outperforms on relative policy divergence.

Outlook: AUD/USD remains bullish; US PPI could trigger short‑term volatility.

USD/CAD

USD/CAD ~1.3660

The pair softens as oil prices recover and USD loses momentum.

Drivers

  • WTI trades near $65.60, supporting CAD.
  • US–Iran talks show “significant progress,” easing immediate supply fears.
  • USD pressured by tariff uncertainty as Trump pushes for 15% global tariffs.
  • Canada GDP expected at 0.1% MoM; a weak print would weigh on CAD.
  • US PPI expected to slow to 0.3% MoM.

Outlook: USD/CAD biased lower toward 1.3630 unless US PPI surprises to the upside.

USD/CHF

USD/CHF ~0.7730

The Franc strengthens on safe‑haven demand as geopolitical tensions persist.

Drivers

  • CHF supported by elevated geopolitical risk and trade uncertainty.
  • Iran refuses to allow enriched uranium exports; US warns of possible military action.
  • Swiss GDP due later today; inflation remains anchored at 0.1%.
  • USD pressured by tariff uncertainty and cautious risk tone.

Outlook: USD/CHF likely to remain heavy; Swiss GDP and US PPI will guide the next move.

Final Summary

The US Dollar stabilises as risk appetite fades and markets await key inflation and growth data. Sterling remains under pressure following a seismic UK by‑election result and persistent BoE easing expectations. The Euro holds firm ahead of German CPI, while the Australian Dollar continues to outperform on hawkish RBA expectations. CAD benefits from firmer oil prices, and CHF remains supported by safe‑haven flows. Today’s German CPI, US PPI, and Canada GDP will set the tone into the weekend.