The US Dollar stayed strong on Friday, and the DXY gained nearly 1% for the week. Core PCE inflation rose to 3% year over year in December. At the same time, the flash Q4 GDP print came in at 1.4% versus 3% expected. The DXY is holding near 97.80. Next US releases include December Factory Orders, the ADP Employment Change (4-week average), the December Housing Price Index, and February Consumer Confidence. Initial Jobless Claims and the Chicago PMI are also due.

Us Data Crosscurrents

EUR/USD traded near 1.1780 after the US Supreme Court ruled against President Donald Trump’s tariffs, which pushed the USD lower. Upcoming euro data includes the German IFO, Italian January CPI, Germany’s GDP and the GfK survey, Eurozone sentiment readings, and German labour data, plus Spain’s flash HICP. GBP/USD was near 1.3490 after a weekly drop tied to UK jobs and inflation data. That data increased expectations of a BoE rate cut next month. AUD/USD was near 0.7080, with Australia’s Private Capital Expenditure due Thursday. USD/JPY was near 155.10 after giving back some gains. Japan will release January Large Retailer Sales, Retail Trade, and Retail Trade S.A. USD/CAD was near 1.3690 after Canada’s December Retail Sales fell 0.4% MoM versus 0.5% expected, following November’s 1.2% rise. The Current Account is due Thursday. Gold traded at $5,077 after recovering most of its weekly losses. Scheduled speakers run from February 23 to 27 and include Lagarde, Waller, Goolsbee, Bostic, Collins, Cook, Barkin, Bullock, Bowman, Pill, and Kocher, plus Donald Trump. Other releases include NZD Retail Sales (Feb 22), Australian CPI (Feb 25), Tokyo CPI (Feb 26), and on Feb 27: Swiss Q4 GDP, Germany’s flash CPI and HICP, Canada’s Q4 GDP, and the US PPI.

Key Catalysts Next Week

US data is sending mixed signals, and that can create opportunity. Core PCE inflation at 3% points to a more hawkish Federal Reserve. But the sharp drop in Q4 GDP to 1.4% points to a clear slowdown. This push and pull has left the US Dollar Index stuck near 97.80. A volatility breakout is possible, so options straddles may be worth considering. The gap between Europe and the UK is widening. EUR/USD is holding near 1.1780, helped by the Supreme Court tariff ruling. In contrast, GBP/USD looks weak near 1.3490 as traders price in a Bank of England rate cut. UK growth also stalled in the final quarter of 2025, with GDP up only 0.1%. That makes a March BoE cut more likely and supports long EUR/GBP positions. Gold at $5,077, along with a stronger yen that pulled USD/JPY down to 155.10, suggests rising fear in markets. That fits with worries about slowing US growth, which is pushing investors toward safer assets. Given how high gold is, call spreads on gold futures can help limit risk while keeping upside exposure. Commodity currencies face an important week. The Aussie has held up near 0.7080, but CPI and Capital Expenditure data will be a key test. The Canadian dollar also looks stuck near 1.3690, and Canada’s Q4 GDP release this Friday is its biggest catalyst in months. Next week also brings a heavy schedule of central bank speakers from the Fed, ECB, and BoE. Since the Fed raised rates by only 25 basis points in December 2025, any hints of a pause or reversal from Fed speakers could reprice markets quickly. Implied volatility may rise, and buying VIX futures could help hedge against sudden policy shifts. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now