Market Insight 19-02-2026

• Written by: Ian Morley
• 19/02/2026

Daily Currency Market Update – Thursday, 19 February 2026

Market Overview

The US Dollar consolidates its weekly gains after the FOMC Minutes delivered a distinctly hawkish tone, with several policymakers signalling that rate hikes remain possible if inflation stalls above target. The USD Index trades near 97.70, its highest level in over a week.

Geopolitics has re‑entered the spotlight. Reports suggest the US military is prepared for potential strikes on Iran as early as Saturday, lifting safe‑haven demand and pushing gold above $5,000. Risk sentiment remains fragile, with US equity futures softer and Treasury yields edging lower.

AUD/USD finds support after Australia’s unemployment rate held steady at 4.1%, while EUR/USD and GBP/USD remain under pressure following Wednesday’s USD surge. USD/CAD softens slightly as oil prices rebound, and USD/CHF trades just above 0.7700 as CHF strength persists.

GBP/EUR

GBP/EUR ~1.1430

The cross drifts lower as UK inflation cools and BoE cut expectations intensify.

Drivers

• UK CPI fell to 3.0% YoY, its lowest in nearly a year.
• Core CPI eased to 3.1%, reinforcing expectations of a March BoE rate cut.
• Rate‑cut odds jumped to ~90% after the CPI release.
• Euro sentiment remains fragile amid speculation Lagarde may step down early, though the ECB denies any decision.
• Eurozone GDP and UK Retail Sales due Friday will be key for direction.

Outlook: GBP/EUR bias remains lower; BoE easing expectations continue to dominate.

GBP/USD

GBP/USD ~1.3500

Sterling struggles near a four‑week low as BoE cut bets rise and USD strength persists.

Drivers

• GBP/USD has fallen for three consecutive sessions, touching 1.3480 overnight.
• UK labour data earlier this week showed unemployment rising to 5.2%, adding to the dovish BoE narrative.
• FOMC Minutes were less dovish than expected, supporting the USD.
• Geopolitical tensions (US–Iran) add safe‑haven support to the Dollar.
• US data today: Jobless Claims, Philly Fed, Pending Home Sales.

Outlook: GBP/USD remains vulnerable; any recovery attempts likely to face selling interest below 1.3550.

EUR/USD

EUR/USD ~1.1800

The Euro edges higher but remains under pressure after Wednesday’s USD surge.

Drivers

• EUR/USD dropped 0.6% on Wednesday as USD strengthened post‑FOMC Minutes.
• Lagarde succession rumours add political uncertainty, though ECB denies any decision.
• US GDP (Friday) and Eurozone/US PMIs will be the next major catalysts.
• FOMC Minutes showed policymakers are not in a hurry to cut rates.

Outlook: EUR/USD remains fragile; upside likely capped near 1.1850 unless US data disappoints.

AUD/USD

AUD/USD ~0.7050

The Australian Dollar gives back early gains despite steady labour data.

Drivers

• Australia’s unemployment rate held at 4.1%, beating expectations.
• Employment rose +17.8K, slightly below forecasts.
• RBA tightening expectations remain firm; markets price a 25 bp hike by August.
• USD strength post‑FOMC Minutes limits AUD upside.
• Geopolitical tensions support USD safe‑haven demand.

Outlook: AUD/USD remains supported above 0.7000 but capped by USD strength; Australian wage and labour data remain key.

USD/CAD

USD/CAD ~1.3695

The pair softens as oil prices rebound, but CAD remains pressured by softer inflation.

Drivers

• Canada CPI eased to 2.3% YoY, below expectations.
• Softer inflation reinforces expectations of further BoC cuts.
• Oil prices rebound on renewed Middle East tensions, supporting CAD.
• FOMC Minutes revived speculation that rate hikes remain possible if inflation stalls.

Outlook: USD/CAD remains supported; a break above 1.3700 would open the door to 1.3740.

USD/CHF

USD/CHF ~0.7720

The pair holds above 0.7700 as CHF gains on safe‑haven flows.

Drivers

• CHF supported by geopolitical tensions and stalled Russia–Ukraine talks.
• Swiss inflation remains at 0.1%, keeping SNB accommodative.
• USD supported by hawkish FOMC Minutes.
• Swiss Trade Balance and Industrial Production due later today.

Outlook: USD/CHF likely to remain range‑bound; geopolitical headlines will drive intraday moves.

Final Summary

The US Dollar consolidates its weekly gains after hawkish FOMC Minutes and rising geopolitical tensions. Sterling remains under pressure as UK inflation cools and BoE cut expectations intensify. The Euro struggles amid political noise and firm USD sentiment. The Australian Dollar softens despite steady labour data, while CAD benefits from firmer oil prices but remains weighed down by softer inflation. CHF stays supported by safe‑haven demand. Today’s US data and geopolitical developments will guide FX markets ahead of Friday’s US GDP and PCE releases.