Market Insight 23-02-2026

• Written by: Ian Morley
• 23/02/2026

Daily Currency Market Update – Monday, 23 February 2026

Market Overview

Markets open the week on a volatile footing as investors digest a dramatic escalation in US trade policy uncertainty and rising geopolitical tensions. The US Supreme Court’s ruling against President Trump’s use of IEEPA to impose unilateral tariffs has triggered a forceful response from the White House, with Trump vowing to impose a blanket 15% global tariff under alternative legal frameworks.

The USD Index trades slightly below 97.50, pressured by tariff‑related uncertainty and a mild risk‑off tone. Equity futures are sharply lower, while oil retreats after last week’s surge. Meanwhile, Iran–US tensions remain elevated ahead of Thursday’s nuclear talks in Geneva, with reports suggesting Washington is considering targeted strikes.

EUR/USD opens with a bullish gap near 1.1820, GBP/USD recovers above 1.3520, and AUD/USD extends gains toward 0.7100. USD/CAD softens as oil prices rise, while USD/CHF dips as safe‑haven flows favour the Swiss Franc.

GBP/EUR

GBP/EUR ~1.1440

The cross holds steady as both GBP and EUR strengthen against a weaker USD.

Drivers

• Supreme Court ruling invalidates IEEPA tariffs; Trump vows new 15% global tariff.
• EU signals it will suspend US trade deal ratification pending clarity on US policy.
• UK Retail Sales surged 4.5% YoY, supporting GBP.
• UK PMIs showed broad expansion in February.
• UK labour market remains soft, reinforcing expectations of a March BoE rate cut (75–80% priced).

Outlook: GBP/EUR likely to remain range‑bound ahead of Germany’s IFO survey and Eurozone PMIs.

GBP/USD

GBP/USD ~1.3520

Sterling holds gains as strong UK data offsets US tariff uncertainty.

Drivers

• GBP/USD rebounds after last week’s four‑week lows.
• UK Retail Sales and PMIs beat expectations, supporting GBP.
• US tariff uncertainty weighs on USD; markets assess Trump’s plan for a 15% global levy.
• Fed’s Waller and BoE’s Taylor speak later today.
• US PPI on Friday will be the next major catalyst for USD direction.

Outlook: GBP/USD remains supported above 1.3500; upside capped unless USD weakens further on trade headlines.

EUR/USD

EUR/USD ~1.1820

The Euro trims gains but holds above 1.1800 as USD weakens on trade turmoil.

Drivers

• EUR/USD opened with a bullish gap after tariff headlines.
• German IFO Business Climate rose to 88.6, but failed to inspire EUR buying.
• Lagarde reiterates she intends to serve until 2027, calming leadership speculation.
• Renewed “Sell America” sentiment weighs on USD.
• Markets still price at least two Fed cuts this year.

Outlook: EUR/USD supported above 1.1800; Eurozone PMIs later today will determine whether the pair can extend higher.

AUD/USD

AUD/USD ~0.7100

The Australian Dollar extends gains as USD weakens on tariff uncertainty.

Drivers

• Trump’s tariff escalation triggers broad USD selling.
• AUD supported by rising expectations of further RBA tightening.
• Domestic data remains firm; policymakers maintain a hawkish bias.
• Geopolitical tensions (US–Iran) cap AUD upside due to risk aversion.

Outlook: AUD/USD remains constructive above 0.7050; risk sentiment and US data will drive intraday moves.

USD/CAD

USD/CAD ~1.3665

The pair drifts lower as oil prices rise and tariff uncertainty weighs on USD.

Drivers

• Oil prices supported by geopolitical tensions and supply risks.
• Canada largely unaffected by IEEPA tariffs, limiting CAD downside.
• US tariff uncertainty undermines USD.
• Traders await US PPI on Friday for policy clues.

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

USD/CHF

USD/CHF ~0.7725

The pair softens as CHF strengthens on safe‑haven demand.

Drivers

• USD pressured by tariff uncertainty and geopolitical risks.
• CHF supported by safe‑haven flows amid US–Iran tensions.
• SNB expected to keep rates steady; inflation remains at 0.1%.
• US PPI on Friday will be key for USD direction.

Outlook: USD/CHF likely to remain heavy; geopolitical headlines will drive intraday volatility.

Final Summary

Markets begin the week on edge as US trade policy uncertainty and geopolitical tensions dominate sentiment. The Dollar weakens after the Supreme Court ruling and Trump’s pledge to impose a 15% global tariff. Sterling and the Euro stabilise, supported by strong UK data and calmer ECB leadership signals. The Australian Dollar extends gains, while CAD benefits from firmer oil prices. CHF remains supported by safe‑haven flows. Today’s IFO survey and Eurozone PMIs will set the tone ahead of a busy week of US data, culminating in Friday’s PPI release.