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Market Insight 09-02-2026

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  • Market Insight 09-02-2026

Daily Currency Market Update – Monday, 9 February 2026

Market Overview

The new week opens with the US Dollar under pressure as markets digest last week’s soft US labour data and rising expectations of earlier Federal Reserve rate cuts. The USD Index has slipped below 97.00, weighed down further by reports that China is advising institutions to reduce exposure to US Treasuries.

Risk sentiment is mixed. Asian markets reacted positively to Japan’s election outcome, while European equities opened cautiously. The delayed US Nonfarm Payrolls and CPI reports — due Wednesday and Friday — will dominate the week’s agenda.

Sterling is attempting to recover after last week’s dovish BoE surprise, while the Euro is supported by improving investor sentiment across the Eurozone.

GBP/EUR

GBP/EUR ~1.1480

The cross weakens as the Euro benefits from improved sentiment and UK political uncertainty.

Drivers

  • Eurozone Sentix Investor Sentiment rose to 4.2, the first positive reading since July.
  • ECB policymakers maintain a steady, data‑dependent stance; rates expected to remain unchanged through 2026.
  • UK political tensions escalate following the resignation of Downing Street Chief of Staff Morgan McSweeney.
  • Reports of a potential criminal investigation add to concerns over government stability.
  • BoE easing expectations continue to cap GBP upside, with markets pricing a possible March cut.

Outlook: GBP/EUR remains vulnerable to further UK political headlines and Eurozone sentiment improvements.

GBP/USD

GBP/USD ~1.3670

Sterling rallies as the Dollar slides on China Treasury‑reduction rumours.

Drivers

  • Reports that China is reducing exposure to US Treasuries triggered broad USD selling.
  • DXY fell sharply below 97.00, its lowest level since late January.
  • UK political turmoil limits GBP upside despite USD weakness.
  • Markets await delayed US NFP (Wednesday) and CPI (Friday).
  • BoE’s 5–4 vote split last week continues to weigh on GBP sentiment.

Outlook: GBP/USD direction hinges on US data this week; political noise remains a drag on Sterling.

EUR/USD

EUR/USD ~1.19

The Euro extends gains as sentiment improves and the USD weakens.

Drivers

  • Eurozone Sentix Index improved sharply to 4.2, boosting EUR demand.
  • USD pressured by rising expectations of Fed cuts and China Treasury rumours.
  • Japanese election outcome supported JPY, adding indirect pressure on USD.
  • ECB speakers expected today, but no shift from last week’s steady policy message.

Outlook: EUR/USD remains supported while USD sentiment stays fragile; upside capped by risk‑off equity moves.

AUD/USD

AUD/USD ~0.7080

The Australian Dollar rises for a second session as risk sentiment stabilises.

Drivers

  • AUD benefits from easing concerns over AI‑driven equity volatility.
  • RBA Governor Bullock reiterated the need for tighter policy due to capacity constraints.
  • Markets now price an 80% chance of a May RBA hike and ~40 bps of tightening this year.
  • Australia’s household spending fell 0.4% MoM, highlighting consumer strain.
  • Geopolitical tensions eased slightly after constructive US–Iran comments.

Outlook: AUD/USD remains constructive above 0.7000; US data later this week will determine momentum.

USD/CAD

USD/CAD ~1.3570

The pair slips below 1.3600 as the USD weakens and oil prices firm.

Drivers

  • DXY extends its decline to 96.89.
  • Oil prices stabilise near $64, supporting CAD.
  • China’s Treasury‑reduction rumours weigh on USD.
  • Markets price two Fed cuts this year, starting in June.
  • Canada’s mixed jobs data last week supports a cautious BoC stance.

Outlook: USD/CAD bias remains lower unless US data surprises to the upside.

USD/CHF

USD/CHF ~0.7680

The Dollar declines as dovish Fed expectations build.

Drivers

  • Markets expect the Fed to hold in March, with cuts likely in June and September.
  • Weak US labour data (ADP +22K, JOLTS 6.54m) reinforces easing expectations.
  • SNB expected to keep rates at 0%; inflation remains subdued.
  • CHF supported by risk‑off sentiment and geopolitical caution.

Outlook: USD/CHF likely to remain heavy ahead of US NFP and CPI later this week.

Final Summary

The US Dollar opens the week on the back foot as weak labour data, China Treasury‑reduction rumours, and rising Fed‑cut expectations weigh on sentiment. Sterling recovers modestly but remains constrained by UK political instability and dovish BoE expectations. The Euro strengthens on improved investor sentiment, while the Australian Dollar benefits from a firmer risk tone and hawkish RBA signals. CAD gains on stable oil prices and a softer USD, and CHF remains supported by safe‑haven flows. The delayed US NFP and CPI reports will be the key drivers for FX markets in the days ahead.