New Zealand’s exports fell to $6.21B in January, down from $7.65B in the previous period. A new report shows New Zealand’s exports dropped to $6.21 billion in January. That is a sharp 18.8% fall from the prior month. This points to weaker overseas demand for New Zealand goods and could pressure the New Zealand dollar (NZD) in the coming weeks.

Implications For Nzd Usd

We may want to position for a lower NZD/USD exchange rate. One direct approach is to buy NZD/USD put options expiring in the next four to six weeks. This view is also supported by signs of slower growth in China, New Zealand’s largest trading partner. China’s manufacturing PMI has stayed just below 50, which signals contraction. The export drop also affects expectations for the Reserve Bank of New Zealand (RBNZ). Inflation was still a concern at the end of 2025, but weaker growth could push the RBNZ toward a more dovish tone. Because of this, interest rate futures that price in the RBNZ holding rates—or even cutting later this year—may look more attractive. We have seen similar setups before. In Q2 2024, weak export data came before a multi-cent decline in the kiwi. Since Australia’s key commodity exports have been more stable, a long AUD/NZD position could work well as a hedge. This trade would benefit if Australia continues to outperform New Zealand.

Alternative Hedge Using Aud Nzd

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New Zealand’s imports fell to $6.73b in January, down from $7.6b in the previous period. That is a decrease of $0.87b. These figures compare the latest monthly total with the month immediately before it.

Imports Decline Signals Cooling Demand

New Zealand’s imports dropped to $6.73b in January, which points to slower domestic demand. This is the biggest month-to-month fall in more than a year, suggesting the economy is cooling faster than expected. We see this as an early warning sign that first-quarter GDP could be weaker. This data also affects how we view the New Zealand dollar, and it makes short positions more appealing. A softer economy increases the chance the Reserve Bank of New Zealand will cut interest rates. We should consider NZD/USD put options or short futures positions to benefit if the currency weakens. The import numbers also match other recent data. For example, the latest ANZ Business Outlook survey showed confidence falling to -15. In early 2025, a similar mix of weak imports and falling business confidence was followed by a 3% drop in the NZD over the next two months. We expect a similar setup now. We expect markets to price in RBNZ rate cuts sooner than the previously expected third quarter. Because of that, positioning for lower rates may be important in the coming weeks. Traders could also consider interest rate swaps that pay floating and receive fixed, in anticipation of lower future rates.

Equity Market Hedging Considerations

This may also be negative for New Zealand equities, since weaker consumer demand can lead to softer corporate earnings. Index derivatives can help hedge risk or position for a possible decline. Buying put options on the NZX 50 index is one simple approach in this environment. Create your live VT Markets account and start trading now.

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US initial jobless claims fell to 206K. This was below the 225K estimate and down from the prior week’s revised 229K, according to the US Department of Labor. Focus now turns to Friday’s releases: the Core PCE Price Index, the advance Q4 US GDP estimate, and preliminary February PMI figures. The US Dollar Index traded near a four-week high of 97.90 after the labor data. Markets also reviewed the latest FOMC Minutes, which showed the Committee was split.

Key Fx Moves And Central Bank Watch

EUR/USD traded near 1.1770 after reports that ECB President Christine Lagarde may leave before her planned retirement in October 2027. GBP/USD traded around 1.3460 as UK inflation cooled and the job market softened. USD/JPY was near 154.90, rebounding from the prior day’s move. Firmer US data and a hawkish tone in the FOMC Minutes supported the pair. AUD/USD hovered around 0.7050 after losing momentum following last week’s three-year high. USD/CAD held near 1.3700, extending a week-long rise. The Bank of Canada kept a dovish stance, and inflation stayed close to its 2% target. Gold traded at $4,982 with little daily change as geopolitical tensions eased. Planned data included UK January Retail Sales, Germany and Eurozone flash PMIs, UK flash S&P Global PMIs, US December Core PCE, and February US S&P Global PMIs. Central banks bought 1,136 tonnes of gold worth about $70 billion in 2022, the largest annual purchase on record, according to the World Gold Council.

One Year Comparison And Market Implications

In February 2025, the US Dollar Index rose to around 97.90 on very strong labor market data. Today, the picture is different. The Dollar is much higher at 104.55 after a year of restrictive policy. With the latest Non-Farm Payrolls report showing job growth slowing to 155,000, we should expect more volatility as markets debate a possible Federal Reserve pivot. A year ago, EUR/USD was near 1.1770. It has since fallen to around 1.0750 as the Eurozone economy stayed weak. Germany’s manufacturing PMI recently came in at 46.1, still in contraction. This increases the risk that the European Central Bank cuts interest rates before the Fed. We should consider strategies that can benefit if the pair continues to fall in the coming weeks. In February 2025, GBP/USD was near 1.3460, pressured by a cooling UK economy. The pair now trades lower at 1.2580. The UK is still dealing with sticky inflation, last reported at 3.2%, well above the Bank of England’s target. This mix of slow growth and high inflation suggests larger and less predictable moves in the Pound. The rate gap has helped push USD/JPY from 154.90 a year ago to 162.30 today. The Bank of Japan has kept an ultra-loose stance, while the Federal Reserve’s key rate stands at 4.75%. As long as this wide gap remains, the pair is more likely to keep rising. A year ago, AUD/USD was pulling back from a three-year high and traded around 0.7050. It now trades at 0.6540 as slowing global growth, especially in China, has weighed on the commodity-linked currency. This sensitivity to risk sentiment may keep the Aussie under pressure. Last year, Gold traded at $1,982 an ounce as geopolitical tensions eased. Today, Gold is much higher at $2,150. It has been supported by economic uncertainty and strong central-bank demand, with central banks adding more than 800 tonnes in 2025. With questions still around the Fed’s next move, Gold remains a useful hedge against a weaker Dollar or a broader market decline. Create your live VT Markets account and start trading now.

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India’s trade deficit rose to USD 34.7bn in January. This was above the Bloomberg consensus of USD 25.4bn and up from USD 25.0bn in December. The increase was mainly due to a 349% surge in gold imports as global prices climbed. Commerzbank says the deficit may narrow in the coming months. It points to support from the US-India trade deal and lower gold prices. Despite the larger deficit, the rupee has stayed steady. The bank expects USD/INR to trade between 90.00 and 91.00 in the near term. It ties this view to slower portfolio outflows as sentiment improves after the US-India trade deal. In early 2025, the trade deficit widened to $34.7bn in January because gold imports jumped. At the time, USD/INR was expected to settle into a 90.00 to 91.00 range. That range held for a few months, but conditions have changed since then. As of February 20, 2026, USD/INR is trading near 92.50, well above the old range. India’s latest trade deficit, for January 2026, narrowed to about $28bn. Even so, broad US dollar strength is now the main driver. This follows the US Federal Reserve keeping interest rates higher for longer than many expected. The optimism from the 2025 US-India trade deal has faded, and portfolio flows have turned negative this year. Foreign Portfolio Investors (FPIs) have withdrawn more than $2bn from Indian markets so far in 2026, putting pressure on the rupee. Policy expectations are also diverging: the Reserve Bank of India is signaling more focus on growth, while the Fed remains focused on inflation. Given this setup, derivatives traders should expect higher volatility than in mid-2025. Buying straddles or strangles may work well if price swings pick up in the coming weeks. These strategies can profit from a move in either direction, which helps in an uncertain market. For traders with a directional view, the easier path still looks like rupee weakness. Buying USD/INR call options or using bull call spreads would position for a move toward 93.00. These approaches offer upside exposure while limiting risk if the market reverses. Still, the RBI has a track record of stepping in to limit sharp currency weakness. This suggests a new, higher trading range could form between 92.00 and 93.50. Selling out-of-the-money USD/INR put options with a strike near 92.00 could be a way to collect premium, based on the view that the central bank will defend that level.

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Argentina’s month-on-month trade balance was $1,987m in January. This was above the forecast of $900m. January’s trade surplus was more than double expectations, which is a clear positive. It suggests the economic adjustments that started in earnest during 2025 are working: exports are rising and imports are falling. For us, this reduces pressure on the Argentine Peso (ARS) and helps the country rebuild foreign currency reserves. This strong trade data, together with inflation cooling from peaks above 25% in late 2025 to 13.2% last month, supports the case for continued stabilization. The government is showing it can improve both the fiscal and external position. That increases confidence that the current policy path is sustainable. Given this, we should consider trades that benefit from a steadier or slowly stronger Peso. With the Central Bank benchmark rate still near 100%, it is expensive to be short ARS. This trade surprise also lowers the risk of a sudden devaluation. One approach is to sell out-of-the-money USD/ARS call options to collect premium, since a sharp USD/ARS spike looks less likely in the near term. For equities, this kind of macro stability is a meaningful tailwind for Argentine stocks, which rallied strongly through 2025. We could look at call spreads on US-listed ETFs such as ARGT to target further upside as investor sentiment improves on firmer data. With implied volatility likely lower after the surprise, long option strategies may be cheaper to enter now.

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Industrial metals have not climbed back to their early-year highs. We do not expect upcoming macro data to support a rebound in the next few weeks. Demand remains weak, and price pressure is still showing up in both spot markets and futures curves. Import prices in the U.S., China, and Germany are down year over year. China’s producer price index (PPI) is also expected to stay in negative territory for the rest of the year. Indonesia has cut nickel ore quotas at its largest mine. Rather than lifting prices, this adds downside risk for base metals and points to more near-term headwinds for commodity markets. These downside risks may also spill over into emerging-market currencies tied to metals. If that happens, many emerging markets may need to keep financial conditions tight. Industrial metals continue to struggle because demand has not improved. With little evidence of a near-term pickup, any rallies are likely to fade. Globally, the deflation signal is clear. Import prices in the U.S. and Germany are falling on an annualized basis, and China remains the main concern. China’s official PPI has now fallen for 16 straight months and was down 2.5% in January. As the world’s largest metals consumer, China’s ongoing factory-gate deflation suggests price spikes will likely be sold into. We saw a similar setup through much of 2025. Hopes for a manufacturing recovery repeatedly ran into weak PMI readings from major economies. That period showed that without a real rise in global industrial activity, metals prices lack fundamental support. Today’s backdrop looks like a continuation of that pattern. Weakness is also showing up in inventories. For example, London Metal Exchange (LME) copper stockpiles are up more than 15% since the start of the year, reaching a six-month high. For derivatives traders, this may support strategies such as selling out-of-the-money call options on copper futures or using bearish put spreads. These trades can benefit if prices keep falling or move sideways. On the supply side, Indonesia’s nickel quota cuts look less like a bullish catalyst and more like evidence of soft demand and surplus management. That strengthens the case for bearish positioning, such as buying puts on nickel-focused ETFs or on mining stocks. If prices stay under pressure, producers may face tighter margins in the near term. A weaker metals outlook also creates headwinds for commodity-linked currencies. The Australian dollar has already dropped below 0.6500 against the U.S. dollar as iron ore prices weakened, and further softness is possible. This setup may also favor bearish trades in currencies like the South African rand and the Chilean peso, using either options or futures.

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UOB economists Enrico Tanuwidjaja and Sathit Talaengsatya expect the Bank of Thailand to cut the 1-day repurchase rate by 25 bps to 1.00% from 1.25% at the 25 February 2026 Monetary Policy Committee meeting. They call 1.00% the terminal rate in the current cycle. They link this expected move to the central bank’s flexible inflation targeting goals: growth, inflation, and financial stability. They also point to forecasts of below-trend growth and soft inflation.

Neutral Rate Framework

They estimate the 2026 cyclical nominal neutral rate at 0.75% to 1.25%, with a midpoint of 1.0%. They base this on low inflation expectations and a Fisher equation framework. Under this view, a cut to 1.00% would put policy closer to neutral, or slightly accommodative, in real terms. They say the goal is to support demand and reduce debt-deflation risk, without pushing rates to an “aggressively low” level. They also flag the risk of “search-for-yield” behaviour and longer-term financial stability issues. The article says it was created with help from an Artificial Intelligence tool and reviewed by an editor. It is credited to the FXStreet Insights Team. With a rate cut next week looking likely, traders should be ready for more downside pressure on the Thai baht. We think the central bank has a solid case to ease, especially after recent data confirmed an ongoing slowdown. For example, final 2025 GDP growth came in at just 1.9%, below government targets. January 2026 inflation was only 0.7%, well under the official 1–3% target range.

Trading And Hedging Approaches

This backdrop makes short-term interest rate derivatives more appealing. We see value in swap contracts that benefit from lower floating rates in the coming months, which would match the expected policy move. If this 25 bp cut is truly the terminal rate for the cycle, positioning should focus on the period right after the 25 February meeting. For FX traders, buying USD/THB call options with March or April expiry is a simple approach. It offers exposure to a weaker baht while limiting maximum risk. The move is not only about weak growth, but also about managing debt-deflation risks in a low-inflation environment. In the past, the Bank of Thailand has moved early to support the economy, including during the 2020 slowdown when it cut rates to a record low. This time, a move to 1.00% is seen as “insurance,” not the start of a long easing cycle. Because of that, derivative trades should be tactical and timed around the decision, since markets may quickly treat 1.00% as the new floor. Create your live VT Markets account and start trading now.

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The US Dollar rose against the Swiss Franc on Thursday after US Initial Jobless Claims fell to 206K from a revised 229K, beating the 225K forecast. This followed the Federal Reserve keeping rates unchanged at 3.50% to 3.75% in January. The minutes showed officials were divided, and some were open to more hikes if inflation stays high. In Switzerland, Q4 industrial production fell 0.7% year over year after a 2.0% rise in the prior quarter. This was the first decline since Q2 2024. The Swiss National Bank kept its policy rate at 0%.

Focus On Us Core Pce

The next major US release is December core Personal Consumption Expenditures (PCE) inflation on Friday. This report could shift rate expectations ahead of the March meeting. USD/CHF rose for a fourth straight session, reaching 0.7762. It gained nearly 0.3%, the highest level in eight trading days. The pair is still below the 50-day EMA at 0.7833 and the 200-day EMA at 0.8048, after pulling back from around 0.8041. The move lifted USD/CHF from near 0.7680 and recovered about half of last week’s decline. Resistance sits at 0.7800 and 0.7834. Support is at 0.7700, then 0.7605. The gap between the US and Swiss economies is widening, and that should shape our approach. The sharp drop in jobless claims to 206K extends the pattern of a resilient US labor market seen through 2025. With this kind of strength, the Fed has little incentive to cut rates from the 3.50% to 3.75% range.

Strategy And Positioning

Tomorrow’s US core PCE inflation report is the main event risk. The market expects a year-over-year reading close to the 3.1% seen in November 2025. A higher number could force markets to reprice Fed expectations for the March meeting. That makes holding outright long positions risky ahead of the release. At the same time, Switzerland is showing clearer signs of weakness. The Q4 drop in industrial production was the first contraction since Q2 2024. This likely reflects slower growth in key European trading partners, including Germany. With the economy under pressure, the SNB is likely to stay on hold at a 0% policy rate. This widening policy gap—between a firm Fed and a stagnant SNB—remains the main driver for USD/CHF. Technically, USD/CHF is bouncing, but it is still in a broader downtrend below key moving averages. We see a better setup in buying short-dated call options to express a bullish view over the next few weeks. This can benefit if strong US inflation pushes the pair above 0.7834, while limiting downside if the inflation data is soft and the downtrend returns. A sustained break above the 50-day moving average would signal improving momentum, with 0.7900 as the next target. But if PCE disappoints and price drops back below 0.7700, it would suggest the recent rise was only a temporary correction. The plan is to watch the market reaction to the inflation report before adding to positions. Create your live VT Markets account and start trading now.

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The Bangko Sentral ng Pilipinas (BSP) cut its policy rate by 25bp to 4.25%, in line with expectations. It paired the cut with more cautious guidance, as the growth recovery remains weaker than expected. The BSP removed wording that suggested it was “nearing the end of easing,” leaving a more neutral policy stance. It also tied future decisions more closely to how quickly confidence improves.

Shift In Policy Guidance

ING cut its 2026 GDP growth forecast to 5.2% and flagged downside risks. Fourth-quarter data showed that weak government spending remains a major drag. This softer public spending was linked to lower fiscal outlays and weaker business and household confidence. The pressure is expected to continue into the first half of 2026, as investigations and unresolved political uncertainty weigh on sentiment. High real rates, weaker GDP prospects, and low confidence were seen as conditions that could allow more rate cuts. Further easing was also described as a factor that could keep the Philippine peso weaker against the US dollar. We see the recent 25bp cut to 4.25% as less important than the change in guidance. By removing language about “nearing the end of easing,” the BSP leaves room for additional cuts. This shift is supported by January 2026 inflation, which cooled to 2.8% and gives the BSP more space to act.

Trading Implications For Php

This more cautious stance reflects a recovery that is losing momentum. In the final quarter of 2025, GDP growth slowed to 4.9%, pressured by weak consumer sentiment and ongoing weakness in government spending. We expect these headwinds to persist through at least the first half of this year. Given this outlook, we expect the Philippine peso to stay under pressure against the US dollar. Derivatives traders may consider positioning for further PHP weakness, such as buying US dollar call options or using long-dated USD/PHP forward contracts. This approach aims to benefit if another rate cut later this year weighs on the peso. USD/PHP has already risen to around 58.50, and this trend may continue as long as markets expect more easing. A similar pattern played out in 2025, when fears of weaker global demand led to a long stretch of peso underperformance. Today’s political uncertainty adds to investor concerns. Beyond FX, the prospect of lower rates may also create opportunities in local rates. Traders could consider “receive-fixed” interest rate swaps to benefit from falling rates. If the BSP cuts again, the floating rate leg would decline, increasing the value of a receive-fixed position. Create your live VT Markets account and start trading now.

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USD/JPY stayed in a tight range on Thursday, holding near 154.95 after a brief move above 155.00. Traders were cautious ahead of Japan’s CPI release on Friday. The US Dollar was supported by solid US data and a hawkish message in the Federal Reserve’s January meeting minutes. Policymakers discussed keeping rates on hold for a while. They also did not rule out future rate hikes if inflation stays above target.

Us Data Supports The Dollar

The US Dollar Index (DXY) was near 97.95, its highest level since 6 February. Initial Jobless Claims fell to 206K for the week ending 14 February, beating the 225K forecast and down from 229K. The four-week average slipped to 219K from 220K. The Philadelphia Fed Manufacturing Survey rose to 16.3 in February, above the 8.5 forecast and up from 12.6 in January. Markets still priced in almost two rate cuts this year. Attention now turns to Core PCE, Q4 GDP, and February PMI data. Japan’s CPI is closely watched for clues about Bank of Japan policy. In a Reuters poll (10–18 February), all 76 economists expected no change in March. A majority, 58% (43 of 74), expected the policy rate to reach 1% by the end of June. Among the 44 who gave timing, June (36%), April (20%), and July (34%) were the most common picks. Based on today’s market conditions, USD/JPY looks set for a continued move toward 160.00. This is very different from the consolidation seen a year ago. In February 2025, the pair hovered around 155.00 as markets weighed a strong dollar against the chance of a Bank of Japan (BoJ) rate hike. Those opposing forces kept the pair temporarily balanced.

Why Yen Weakness Has Persisted

In early 2025, many expected the BoJ to raise its policy rate to 1% by that summer. That did not happen. Central bank data shows that the BoJ’s key policy rate is still only 0.25% today. This slower path has been a major reason for ongoing yen weakness over the past twelve months. On the US side, the hawkish Fed stance seen in early 2025 remained in place for most of the year as inflation stayed sticky. January 2026 US inflation data showed core CPI still high at 3.2%. This keeps the interest rate gap wide in favor of the US dollar. That gap continues to support the carry trade, where traders borrow yen to buy dollars. This backdrop suggests that derivatives traders may want to consider USD/JPY call options to gain from more upside. For instance, buying April calls with a 162.00 strike would offer exposure to a possible breakout. The benefit is defined risk while still participating in upside momentum. Still, the risk of intervention by Japanese authorities is now much higher than it was at 155.00. That makes buying volatility more appealing, either as a hedge or as a standalone trade. One approach is a long straddle, which means buying both a call and a put with the same strike and expiry. This can profit from a large move in either direction. In the weeks ahead, watch inflation data from both countries and any change in central bank messaging. If US inflation starts to cool or the BoJ turns more aggressive, the outlook could change quickly. For now, the easiest path for USD/JPY still appears to be higher. Create your live VT Markets account and start trading now.

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