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Market Insight 16-02-2026

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  • Market Insight 16-02-2026

Daily Currency Market Update – Monday, 16 February 2026

Market Overview

FX markets open the week quietly, with major currency pairs holding tight ranges as traders await a heavy run of data and central‑bank commentary. The US is closed for Presidents Day, keeping liquidity thinner than usual and limiting directional conviction.

The US Dollar ended last week softer after CPI undershot expectations, rising 2.4% YoY versus the 2.5% forecast. The USD Index trades sideways near 97.00 this morning. Headlines suggesting President Trump may support Israeli strikes on Iran’s missile programme have not materially shifted risk sentiment, with WTI steady around $62.80.

GBP/EUR

GBP/EUR ~1.1495

The cross trades slightly higher as soft Eurozone industrial data weighs on the Euro.

Drivers

  • Eurozone Industrial Production fell 1.4% MoM in December; November revised down to 0.3%.
  • Annual production slowed to 1.2%, missing expectations.
  • ECB expected to keep policy unchanged through 2026; markets see no cuts before 2027.
  • UK traders await a heavy data slate:
    • UK employment (Tuesday)
    • CPI, PPI, RPI (Wednesday)
  • Markets price a ~65% chance of a March BoE rate cut.

Outlook: GBP/EUR likely to remain range‑bound until UK jobs data and Eurozone sentiment indicators provide fresh direction.

GBP/USD

GBP/USD ~1.3645

Sterling consolidates as markets await UK labour data and US CPI follow‑through.

Drivers

  • UK unemployment expected to hold at 5.1%, with wage growth slowing to 4.2%.
  • Softer wage data would reinforce expectations of a near‑term BoE cut.
  • UK CPI expected to fall to 3.0% YoY on Wednesday.
  • USD steady in holiday‑thinned trading; DXY near 97.00.
  • Fed Governor Bowman speaks later today.

Outlook: GBP/USD likely to remain quiet until Tuesday’s UK jobs data; broader USD tone still driven by last week’s soft CPI.

EUR/USD

EUR/USD ~1.1850

The Euro edges lower as Eurozone industrial data disappoints and markets await a busy week.

Drivers

  • Industrial Production fell 1.4%, confirming manufacturing softness.
  • EUR/USD remains within last week’s range despite softer US CPI.
  • Trading subdued with Asia and US markets closed.
  • ECB’s Nagel and Fed’s Bowman due to speak later today.

Outlook: EUR/USD direction hinges on ZEW sentiment, German CPI, and Eurozone data later in the week.

AUD/USD

AUD/USD ~0.7090

The Australian Dollar rebounds ahead of RBA minutes and employment data.

Drivers

  • AUD/USD up 0.2% after a two‑day correction.
  • RBA minutes due Tuesday; markets expect a continued hawkish tone after February’s 25 bp hike.
  • Australian employment expected to show +20K jobs in January; unemployment seen rising to 4.2%.
  • USD steady in holiday‑thinned trading.

Outlook: AUD/USD remains supported above 0.7050; RBA minutes and jobs data will set the tone for the week.

USD/CAD

USD/CAD ~1.3610

The pair holds steady in thin volumes as both US and Canada observe holidays.

Drivers

  • Canada CPI due Tuesday: inflation expected at 2.4% YoY.
  • Oil steady near $62.70, offering limited support to CAD.
  • Geopolitical caution persists ahead of US–Iran talks in Geneva.
  • Softer US CPI last week reinforced expectations of Fed cuts later this year.

Outlook: USD/CAD likely to remain range‑bound until Canada CPI and US data later in the week.

USD/CHF

USD/CHF ~0.7700

The pair trades sideways as weak inflation in both the US and Switzerland keeps direction muted.

Drivers

  • Swiss CPI fell 0.1% MoM; annual inflation steady at 0.1%.
  • CHF strength raises speculation of potential SNB intervention.
  • USD consolidates after soft US CPI (0.2% MoM, 2.4% YoY).
  • Markets expect the Fed to cut rates later this year to support labour‑market recovery.

Outlook: USD/CHF likely to stay range‑bound until liquidity returns and key US data hits later in the week.

Final Summary

Markets open the week quietly with the US closed for Presidents Day and Asia still in Lunar New Year mode. The Dollar trades sideways after last week’s softer CPI, while Eurozone industrial data weighs modestly on the Euro. Sterling holds firm ahead of a heavy UK data slate, and the Australian Dollar rebounds ahead of RBA minutes and employment figures. CAD and CHF remain steady in thin volumes. The week’s major catalysts begin Tuesday with UK jobs and Canada CPI, followed by UK inflation, Eurozone sentiment, and the FOMC minutes.