Major currency pairs were mostly flat on Monday because US stock and bond markets were closed for Presidents’ Day. This week’s key events include UK jobs and inflation data, plus the US PCE price index. Iranian Foreign Minister Abbas Araghchi arrived in Geneva for a second round of US–Iran nuclear talks. The goal is to reduce tensions and avoid a new military clash, after Ayatollah Ali Khamenei warned a wider regional conflict could be possible.

Major Pairs Snapshot

The US Dollar Index held near 97.10. EUR/USD traded around 1.1850, USD/JPY near 153.50, AUD/USD near 0.7070, GBP/USD near 1.3630, and USD/CAD near 1.3630. Gold traded near $4,991 and edged lower ahead of major data. Markets are also watching the FOMC Minutes later this week and Canada’s January CPI on Tuesday. Tuesday brings the RBA minutes, Germany’s January Harmonised CPI, UK claimant count change, UK employment change, the UK ILO unemployment rate, and Canada’s January CPI. Wednesday includes the RBNZ rate decision, UK January CPI, and the FOMC Minutes. Thursday features Australia’s January employment change and unemployment rate. Friday includes UK January retail sales, Germany flash HCOB composite PMIs, Eurozone PMIs, UK flash S&P Global PMIs, US December Core PCE, and February US S&P Global PMIs.

Gold Demand And Central Bank Role

Central banks bought 1,136 tonnes of gold worth about $70 billion in 2022, the highest yearly total on record. Gold often moves in the opposite direction to the US Dollar and US Treasuries, and it is priced in dollars (XAU/USD). The market backdrop on February 17, 2026 is very different from this time last year. In February 2025, markets were quiet ahead of key inflation releases. We see a similar setup now as traders wait for this month’s PCE data. The biggest difference is where major assets started after a year of large moves. Last year, the US Dollar Index was near 97.10. Now it is much higher, around 104.50. This rise reflects the Federal Reserve’s stance on keeping rates higher to control inflation. January 2026 inflation has eased to 2.4%, but it is still above the 2% target. The dollar has been the winning trade for much of the year, but the main question now is when the Fed might pivot. A stronger dollar has weighed on other major currencies. EUR/USD is now near 1.07, down sharply from about 1.1850 in February 2025. The split between the Fed and the European Central Bank matters here, especially as the ECB has hinted at possible rate cuts. As the next policy meetings approach, EUR/USD options may be useful for managing expected swings. Geopolitics also shaped last year’s market tone. The Iran nuclear talks added a steady layer of risk. Those talks later stalled, but tensions in other regions have continued. That keeps headline risk high and makes risk controls essential. The yen has been another key story. USD/JPY was around 153.50 in February 2025. Today it is closer to 150.00. This shift reflects the Bank of Japan’s slow move away from ultra-loose policy in late 2025. Because of that, betting against the yen is no longer as straightforward as it was a year ago. GBP/USD shows a similar adjustment. The pair has fallen from about 1.3630 to around 1.25. Political stability under PM Keir Starmer in early 2025 did not offset the drag from stubborn inflation. The latest January 2026 data puts UK CPI at 3.8%, which remains a major challenge for the pound. Gold shows the biggest reversal. In February 2025 it traded near an extreme $4,991 per ounce. Today it is closer to $2,350. That suggests last year’s heavy safe-haven demand has faded. In this environment, strategies built for lower volatility, such as short strangles, may fit better than in 2025. Central bank buying is still supporting gold, but at a slower pace than the record levels of 2022. World Gold Council data for 2025 shows central banks added about 800 tonnes. That is still strong, but it was not enough to keep prices near last year’s highs. The trend suggests a firmer floor for gold, but a lower ceiling than before. This week, the focus is on Canada’s inflation report and the US Federal Reserve minutes, similar to the setup in 2025. The main release, however, is Friday’s US Core PCE. It is the clearest guide to the Fed’s next step and is likely to set the tone for markets in the weeks ahead. Create your live VT Markets account and start trading now.

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