USD climbed steadily after a batch of stronger-than-expected US data, with durable goods orders, housing permits, and industrial production all beating forecasts. There is some suggestion that the USD rally may partly reflect short covering, but markets are increasingly focused on solid US economic activity rather than soft job numbers.
Elsewhere, NZD dropped 1% after RBNZ Governor Anna Breman signaled no near-term rate hikes, GBPUSD and EURUSD extended losses, with GBP pressured by dovish UK CPI readings and EUR sentiment influenced by reports that ECB President Christine Lagarde may step down before her 2027 term ends.
*Daily move - against G10 rates as of 17:00 GMT, 18.02.26
** Indicative rates - interbank rates as of 17:00 GMT, 18.02.26
The AUD rose after unemployment held at 4.1% (vs. 4.2% expected), reinforcing expectations of a May rate hike, with markets now pricing an 88% probability of a May hike, up from 80% before the data.
Overnight, USD gained more support, following slightly hawkish FOMC minutes, which highlighted ongoing concern around sticky inflation and noted that “several” participants saw scope for upward rate adjustments if price pressures persist.
Today’s calendar is packed, with multiple key releases in the afternoon. Markets will watch Continuing Claims (7-Feb), Philadelphia Fed Business Outlook (Feb), Wholesale Inventories (Dec), Trade Balance (Dec), and Initial Jobless Claims (14-Feb). The Pending Home Sales (Jan). After yesterday’s USD strength on durable goods, housing, and industrial data, these readings could reinforce the USD, if they surprise to the upside, or trigger some consolidation, if they disappoint.
Eurozone: The Consumer Confidence survey for February is also due tomorrow. With EUR under pressure yesterday on ECB uncertainty, a soft print could keep EUR vulnerable, while a better-than-expected reading may provide some support.
Expect USD to remain the main driver of FX moves as markets write off bets on rate cuts, a start contrast to earlier this month.
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