Market trading was range-bound with a slight USD bias to the downside; JPY was notably weak; GBP gains were sustained by an improved risk sentiment but capped by political risk. AUD continued to outperform amid relative macro strength and rising rate expectations – all set against the backdrop of tariff uncertainty and global policy divergence.
*Daily move - against G10 rates as of 17:00 GMT, 25.02.26
** Indicative rates - interbank rates as of 17:00 GMT, 25.02.26
Today's spotlight falls on US labour data, Tokyo inflation, and UK political risk. In the US, Initial Jobless Claims (prev. 206k) will act as a pulse check on labour market resilience. A meaningful rise would lean USD-negative, while another contained print reinforces the higher-for-longer Fed narrative and supports the USD at the margin. Geopolitics will be agenda with Iran and the US set to have a third round of nuclear talks in Geneva.
In Japan, focus is squarely on Tokyo CPI (YoY seen 1.4%, ex-fresh food 1.7%), both expected to cool from prior readings. A softer inflation print would likely temper normalisation expectations at the Bank of Japan and weigh on JPY, while any upside surprise could quickly revive rate-hike pricing and support the yen.
GBP has eased off of yesterday’s highs ahead of today’s Gorton and Denton by-elections. Market pricing (~70% Greens, 20% Reform, 10% Labour) keeps GBP trading with a political risk premium. A Greens outcome would likely reinforce concerns of a leftward tilt and weigh modestly on GBP; Reform less so; Labour would be seen as stabilising. As such, GBP crosses remain headline-sensitive into the vote.
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