The US Dollar (USD) has strengthened slightly, though gains against major currencies remain limited. European stocks have declined, while US equity futures show some firmness.

Bond markets have softened, with Treasury yields rising by 4-5 basis points. The mixed performance of the USD appears influenced by tariff uncertainties and month-end demand.

The Japanese Yen (JPY) and Swiss Franc (CHF) are lagging, whereas the Mexican Peso (MXN) and Canadian Dollar (CAD) are performing better. Technical indicators show the USD trading below its 100-day moving average, with sensitivity to weak US economic data following a recent drop in consumer confidence.

The dollar’s modest rise suggests that traders are not entirely convinced of its direction, especially with ongoing questions about trade policy and the usual month-end shifts in currency flows. Even though there is some resilience in US markets, European equities have lost ground, indicating that risk appetite is under pressure. Meanwhile, the bond market is adjusting, with Treasury yields edging higher.

Among the major currencies, the yen and franc are underperforming, hinting at declining demand for traditionally safer assets. At the same time, the peso and Canadian dollar are showing relative strength, which could be partly due to stabilising commodity markets or confidence in North American economic prospects.

From a technical perspective, the dollar is holding below its 100-day moving average, reinforcing the idea that it needs a stronger push—perhaps in the form of solid economic data—to sustain any upward movement. Traders have already seen how quickly sentiment can turn following weaker US reports, such as the recent soft consumer confidence figures.

With all of this in mind, we are watching how economic releases shape expectations. Markets are highly responsive to shifts in data, and any signs of further weakness could weigh on the dollar, affecting broader asset pricing. Bond yields are another focal point, as their movement reflects adjustments in interest rate outlooks and risk preferences.

As we move forward, the balance between market positioning and fresh macroeconomic signals will determine how the dollar trades. Recent movements in US futures suggest some optimism, but whether that translates into broader momentum depends on the incoming data and any policy shifts that emerge.

European equity markets experienced a decline, with the Stoxx 600 dropping by 1.0% and the German DAX falling by 1.2%. Other notable movements included France’s CAC, decreasing by 0.7%, while the UK FTSE 100 gained 0.2%.

Spain’s IBEX dropped by 0.6%, and Italy’s FTSE MIB fell by 1.6%. The German market remained resilient amid discussions of potential 25% tariffs on Europe proposed by Trump.

This downturn reflects unease among investors, with weakness spreading across sectors. The Stoxx 600 struggling suggests broader concerns, not just country-specific troubles. Germany’s DAX saw an even larger pullback, dragging down sentiment further. France’s CAC fared slightly better but still ended lower, underscoring how widespread the selling pressure remained. While the UK’s FTSE 100 managed to stay in positive territory, this tells us more about domestic factors than broader optimism.

Spain’s IBEX and Italy’s FTSE MIB followed the downward trend, with the latter taking the heaviest losses. Pressure on Italian stocks reflects investor caution, and market participants should consider how risk appetite has shifted. Shortly after Trump’s remarks on possible tariffs, German equities showed some ability to hold firm, but this is not necessarily indicative of longer-term stability. The possibility of a trade conflict raises fresh concerns, and this is where reactions become more layered.

If trade restrictions move closer to reality, we will likely see renewed volatility, particularly in sectors that rely on European-American trade. Those with positions exposed to these industries should remain attentive to statements from policymakers on both sides of the Atlantic. Short-term moves may not tell the whole story, but they often dictate sentiment shifts that can build momentum.

The fact that the UK market was able to post a slight gain highlights diverging regional factors. Currency movements may have helped mitigate broader weakness, but this doesn’t mean risks are absent. We are watching how investors position themselves, especially in response to central bank expectations. These elements will shape where liquidity flows, affecting how assets behave in the short term.

With political discussions weighing on European shares, traders should monitor for any further developments hinting at policy shifts. Making sense of which industries are most exposed will be just as important as tracking overall performance. While broad indices tell part of the story, sector-specific trends could hold the key to understanding where opportunities or risks might emerge in the coming weeks.

Initial Jobless Claims in the US rose to 242,000 for the week ending February 22, surpassing expectations and exceeding the prior week’s revised figure of 220,000. The seasonally adjusted insured unemployment rate stood at 1.2%, while the four-week moving average increased by 8,500 to 224,000.

Continuing Jobless Claims decreased by 5,000, reaching 1.862 million for the week ending February 15. The data indicates ongoing changes in the employment landscape amidst economic shifts.

A noticeable rise in initial jobless claims suggests that more individuals are filing for unemployment benefits than anticipated. The figure jumping to 242,000 implies that layoffs may be picking up, a factor that often plays into market expectations around monetary policy. At the same time, the four-week moving average has climbed, which smooths out weekly volatility and further supports the idea of a weakening labour market.

The insured unemployment rate ticking up to 1.2% provides another layer of insight. While still relatively low, any upward movement hints at a possible slowing in hiring or increased difficulty in finding new employment. That being said, a single week’s report does not establish a trend, but the rise does stand out given broader concerns about economic momentum.

Continuing claims, on the other hand, dipped slightly—down by 5,000 to 1.862 million. This hints that some who had previously filed for unemployment may have found work or dropped out of the system. However, the overall number remains elevated compared to earlier in the year, meaning there are still pressures in the job market that should not be overlooked.

For traders focused on derivatives, jobless claims serve as a key input for understanding where monetary policy might be headed. A weaker labour market could reinforce expectations of rate adjustments, potentially affecting bond yields, currency movements, and overall market sentiment. That makes this data particularly relevant in the days ahead, as it will shape expectations around upcoming economic releases and any shifts in the central bank’s stance.

The AUDUSD has decreased by nearly 0.9%, marking its largest decline of 2025 and the most substantial drop since December 2024. This decline follows President Trump’s announcement of 25% tariffs on Mexico and Canada, with an additional 10% tariff on Chinese goods.

Amid Australia’s close economic ties to China, negative developments impact the AUD and NZD, contributing to notable decreases today. The AUDUSD has approached the 50% retracement of the February range at 0.62474, with the day’s low at 0.62495.

Price action near 0.62474 indicates a balance between buying and selling, with a potential break below this level leading to further declines. Target levels for downside pressure include 0.62348 and 0.62097.

Conversely, should buyers defend 0.62474, initial upside targets are set at 0.62743 and 0.6285. The AUDUSD remains under pressure, with further declines possible if risk-off sentiment continues.

This sharp drop in the AUDUSD reflects how external trade policies directly affect investor sentiment and market positioning. With Donald’s tariff announcement targeting three of the United States’ largest trading partners, risk-sensitive currencies, including Australia’s, have felt the weight of the shift almost immediately. Given the country’s deep economic reliance on Chinese demand, fresh trade barriers have only amplified pressure on an already struggling currency.

The technical positioning of the pair is now highly relevant for the coming sessions. The dip towards 0.62474 signals that traders are weighing whether this level serves as a holding point or merely a temporary pause. Price action around this area suggests buyers and sellers are testing each other’s conviction. A decisive drop below would likely trigger further losses with the next downside focus landing at 0.62348. Beyond that, 0.62097 may follow should bearish pressure remain unchallenged.

However, stability at 0.62474 would offer a reprieve for those looking for an upward move. If buying interest strengthens, we would then turn towards 0.62743 as an area of interest, followed by 0.6285. Any recovery will likely depend on a shift in market sentiment or a pullback in the broader risk-off movement that is currently gripping markets.

Risk appetite remains fragile, and with fresh trade tensions dictating flows, the coming weeks could see increased volatility. Traders will need to remain focused on key technical levels while also monitoring potential responses from policymakers. A continuation of negative trade rhetoric or intensifying headwinds from China would lean heavily against any sustained recovery attempts.

Durable Goods Orders in the US increased by 3.1% in January, totalling $286 billion, according to the US Census Bureau. This rise follows a 2.2% drop in December and exceeds the market expectation of a 2% increase.

Excluding transportation, new orders were nearly unchanged; however, orders excluding defence grew by 3.5%. Transportation equipment, which had previously seen two consecutive monthly decreases, contributed significantly by increasing by $8.6 billion or 9.8%, reaching $96.5 billion.

Despite these figures, the US Dollar’s valuation remained relatively unaffected, with the US Dollar Index up 0.16% at 106.65.

What we see here is a rebound in durable goods orders following the decline in December, which suggests there has been renewed activity in manufacturing. The 3.1% increase exceeded expectations, indicating a stronger-than-anticipated demand for long-lasting goods. However, when excluding transportation, orders were essentially flat, meaning the overall increase was largely driven by that sector. The sharp rise in transportation equipment orders, which were up by nearly 10%, was the driving force behind this recovery.

That said, defence-related orders did not weigh down the numbers, as figures excluding defence rose by 3.5%. This points to a recovery in commercial and consumer segments, rather than military spending artificially boosting the total. Traders should take note that this type of breakdown helps clarify whether demand across different sectors is broad-based or narrowly concentrated.

Despite these figures, the currency did not see much movement, with the US Dollar Index posting only a modest 0.16% gain. This suggests that markets were largely prepared for an increase, or that other macroeconomic factors held greater influence on the dollar. With this in mind, those involved in derivatives trading should not assume that strong data points alone will move the currency, particularly if market expectations have already factored them in.

Looking ahead, future readings on economic health, such as upcoming manufacturing surveys and employment reports, will help determine whether this increase was an isolated rebound or the start of a sustained trend. The lack of reaction in the dollar also means that traders may need to look beyond headline figures and consider broader economic conditions before adjusting positions.

BOJ’s Ueda noted that ongoing discussions regarding tariffs are causing significant uncertainty for central banks. He stressed the importance of examining US tariff policies and international reactions, as they could impact both global and Japanese economies.

Decisions on monetary policy will depend on this analysis of US developments and their effects. Ueda’s remarks reflect the current confusion surrounding future economic actions, and he refrained from discussing recent changes in Japan’s long-term interest rates.

Kazuo’s comments highlight how uncertain conditions are shaping economic policy considerations. With tariffs under discussion, central banks must weigh potential consequences on trade flows and growth. The concern is clear—if policy shifts in the United States disrupt markets, the effects will not be contained within a single country. Policymakers in Japan, as well as elsewhere, are watching closely.

The focus on American policy choices is not misplaced. Trade restrictions can alter supply chains, production costs, and demand. If major economies adjust their stance, businesses and investors will react accordingly. This means central banks must be prepared for possible shifts in inflation trends, currency values, and investment behaviour.

Kazuo stopped short of offering insight into Japan’s long-term interest rates. That silence speaks volumes. It suggests that officials are in no rush to reveal their thinking while external risks remain uncertain. With ongoing trade discussions and potential policy shifts abroad, caution makes sense. Decisions will not be made in isolation.

We recognise that these ongoing assessments matter for financial markets. Volatility tends to rise when policy directions are unclear. If Japan’s central bank sees reasons to adjust its stance, it will likely be responding to clearer signals from abroad. Until then, the wait-and-see approach remains in place.

For now, those watching markets should stay alert to any changes in the tariff debate. If new measures are announced, the effects could ripple across currencies, equities, and bonds. Whether this leads to shifts in interest rates or monetary policy decisions will depend on how events unfold in the coming weeks. Close monitoring will be necessary to interpret any indications from policymakers.

GBP/JPY has risen to nearly 189.60, supported by a robust performance of the Pound Sterling ahead of the meeting between US President Trump and UK PM Starmer. The Bank of England’s Dhingra advocates for a swift policy easing to counteract declining consumer demand, while the Bank of Japan is expected to tighten its monetary policy further this year.

The Pound is showing strength against various major currencies today, with notable gains against the Japanese Yen. Starmer is anticipated to discuss trade policies, particularly tariffs, with Trump, who expressed a willingness to negotiate and avoid imposing tariffs on the UK.

Market speculation supports that the Bank of England will execute two interest rate cuts within the year. This follows a reduction of 25 basis points to 4.5% in a recent policy meeting, with Dhingra suggesting an even faster easing cycle than previously expected due to weak demand.

While the Yen is struggling overall, inflation persists above 2% in Japan, fostering a belief that the Bank of Japan will implement further interest rate rises this year. Encouragement from rising wage growth has also contributed to these expectations.

With Sterling pushing upward towards 189.60 against the Japanese Yen, traders have taken note of its firm performance as political and monetary shifts continue to draw attention. The upcoming meeting between Keir and Donald introduces additional stakes, particularly concerning tariff discussions. If trade restrictions are eased or avoided altogether, the Pound could maintain its strength in the short term. However, this also depends on monetary policy shifts, where views within the Bank of England differ regarding the pace of interest rate cuts.

Swati has made it clear that consumer demand is faltering and has pushed for more aggressive rate reductions. With policymakers already implementing a 25 basis-point cut to 4.5%, there is growing anticipation that this will not be the last adjustment this year. Market sentiment supports the view that at least two more cuts could follow. A faster pace of easing would, in theory, weaken the Pound, but this has not yet played out in full. For now, the UK currency is benefiting from broader market forces and an optimistic stance ahead of political negotiations.

Meanwhile, the Yen remains under pressure, though expectations for Bank of Japan tightening persist. Inflation continues to run above 2%, reinforcing the belief that interest rates will be lifted further before the year is out. Wage increases have helped solidify this outlook, making it more difficult for policymakers in Tokyo to delay further action. Any rate rises in Japan could lend support to the Yen, but traders have yet to fully price in the timing and scale of these moves.

Those trading derivatives in the coming weeks should consider the contrasting policy approaches from central banks in London and Tokyo. While Sterling remains supported for now, the Pound’s trajectory could shift as further details emerge around both trade policy talks and interest rate strategies. Uncertainty lingers, particularly with the timeline of monetary moves still very much at play.

The EURUSD has declined due to renewed tariff concerns affecting market sentiment. The President announced that tariffs on Mexico and Canada will continue as planned, with tariffs on China escalating from 10% to 20%, alongside concerns regarding potential European tariffs.

The EURUSD has approached a key support zone characterised by several important technical levels, including 1.04065, 1.0401, and 1.0405, which may prompt a temporary pause or reversal in trading activity.

Stock markets have also dipped, with the S&P index down by 15.99 points or 0.27%, and the NASDAQ index down by 150 points or 0.78%.

US yields remain elevated but stable, with the 10-year yield rising by 3.8 basis points to 4.286%, and the two-year yield increasing by three basis points to 4.100%.

This downturn in the euro’s value mirrors persistent caution in financial markets. With tariffs rising, concerns about more trade restrictions targeting Europe are mounting. The possibility of additional barriers has kept traders on edge, leading to lower appetite for risk.

The pair hovering at this support level suggests that traders are monitoring these prices carefully. Past activity around these figures implies they have been areas where momentum has shifted. If selling pressure continues, a break lower could push it towards fresh lows, potentially drawing in even more selling. If a bounce occurs, short-term upward moves could develop, but resistance zones overhead may limit advances.

Shares reflecting broader uncertainty reinforce this risk-off mood. With the S&P and NASDAQ both declining, investor sentiment remains weak. While these declines are not extreme, they indicate a reluctance to bid prices higher amid reduced confidence.

Bond markets tell a slightly different story. Yields remain elevated yet without major volatility. The 10-year yield ticking up by a few basis points suggests that expectations around monetary policy have not changed much. Shorter-dated bonds moving in a similar fashion support this, signalling that markets do not foresee abrupt shifts from central banking officials.

In the days ahead, movements will likely be dictated by responses to the latest trade developments. Traders will need to factor in shifting sentiment and how upcoming statements affect positioning. Watching how financial instruments respond to changes in tone from policymakers will be necessary to gauge possible moves.

In January, US durable goods orders excluding transportation registered no growth, falling short of the expected 0.3% increase. This marked a deviation from earlier predictions and reflects ongoing economic uncertainties.

The broader market is experiencing varied trends, with the EUR/USD trading around the 1.0400 support level amidst a stronger US Dollar. Meanwhile, the GBP/USD remains under pressure near 1.2630, influenced by market sentiment towards the Greenback.

Gold prices are also down, hitting two-week lows below $2,880 per troy ounce, driven by higher yields and evolving tariff discussions. In cryptocurrency, Litecoin surged 24% as institutions accumulate assets in anticipation of an ETF launch.

Orders for durable goods in the US, excluding transportation, failed to rise as expected in January, staying flat rather than increasing by 0.3%. Given previous forecasts, this suggests that businesses may be hesitant to commit to large investments, likely due to uncertainty surrounding interest rates and broader economic conditions.

Looking at currency markets, the Euro remains under pressure, struggling to hold above the 1.0400 mark against the Dollar. This suggests that traders continue to favour US assets, possibly due to expectations of tighter Federal Reserve policy. Similarly, Sterling is seeing selling pressure as it trades near 1.2630, showing that the Greenback’s strength is weighing on sentiment.

Gold has fallen, now sitting at its lowest price in two weeks, slipping below $2,880 per troy ounce. The primary forces behind this are rising yields, which make non-yielding assets like gold less attractive, and discussions around potential tariff adjustments, which may be altering investment flows.

In digital assets, Litecoin has surged by 24%, with institutional investors increasing their exposure. This buildup hints at growing confidence in potential exchange-traded fund approvals, which could drive further inflows and enhance liquidity in the space.

For traders focused on derivatives, it will be important to track how these forces develop in the coming weeks, as each of these assets moves in response to policy changes, shifts in sentiment, and technical levels that could either hold firm or give way.

USDCAD has increased following the announcement of a 25% tariff on Canadian imports by Trump, set to take effect in March. Key technical levels for the pair include the 50% midpoint of February’s trading range, located between 1.4448 and 1.4471.

After a decline that caused the price to drop to 1.4150, USDCAD managed to recover, returning to the “Red Box,” a consolidation zone from earlier in the year. The recent rise has seen the pair surpass the 100-bar moving average on the 4-hour chart, indicating a shift in market sentiment.

Current support levels to monitor include 1.4395 and 1.4366, while resistance levels are placed between 1.4448 and 1.4471. A break above 1.4471 would suggest further upward movement for USDCAD.

With the 25% tariff announcement weighing on sentiment, the latest movements in USDCAD have drawn attention to both technical and fundamental shifts. The re-entry into the earlier consolidation zone suggests a reassessment of previous positioning, particularly as traders evaluate the broader implications of trade policy adjustments. Recovering from 1.4150 and climbing past the 100-bar moving average on the 4-hour chart hints at renewed confidence among buyers. This is not without hesitation, but the recent bounce highlights a readiness to challenge previous resistance levels.

From here, monitoring reactions around 1.4395 and 1.4366 will be necessary, as those points will test whether recent gains can hold or whether sellers start to exert new pressure. A firm move below those marks would shift attention back towards previous lows, especially given February’s price range. That said, a push beyond the 1.4471 resistance level would confirm further strength, making room for additional upside. The progression through this structure will define near-term expectations, given the backdrop of fresh economic developments.

Beyond technicals, market participants will need to account for how policy adjustments interact with broader demand dynamics. With volatility increasing, sudden shifts in positioning are likely to play a role in the coming sessions. While price action remains contained within familiar levels for now, any breakout would warrant close inspection. For those managing risk, the previously defined support and resistance figures provide areas of interest, particularly as sentiment develops ahead of March.