US dollar moves are still tied to US economic data and expectations for Federal Reserve rate cuts. This remains true despite new de-dollarisation headlines and swings in AI-related stocks. Softer US inflation and concerns in the AI sector have also weighed on the dollar. A long-term shift in reserves has been underway for two decades. Global FX reserves have slowly moved away from the USD toward gold and smaller reserve currencies such as AUD, CAD, and CHF. Even so, the dollar’s near-term direction is still driven by US growth and what it means for the Fed’s easing cycle.

Usd Weakness And Global Crosscurrents

In early 2026, US equities and the USD have underperformed. At the same time, stronger non‑US equity markets and better global growth expectations have supported a softer USD. This weakness has been most clear against commodity currencies such as AUD and NZD, as well as higher-yielding emerging market currencies. Resilient US growth could limit how far the USD falls. If wage growth and inflation pressures keep easing, long-end Treasuries may again act as a hedge against growth risks. That could support the USD’s safe-haven role. The article says it was created using an AI tool and reviewed by an editor. It also describes the FXStreet Insights Team as journalists who curate market observations, with input from both internal and external analysts. The USD is falling mainly because of economic data, not only because of de-dollarisation headlines. The latest January CPI report showed inflation at 2.8%, below expectations. That increased bets on earlier Fed rate cuts and reinforced the dollar weakness seen since late 2025.

Positioning For Data Driven Volatility

This points to strategies that may benefit from a weaker USD, especially against commodity currencies. The Australian and New Zealand dollars look firm, helped by recent Chinese industrial data that showed a rebound and supported commodity prices. Buying call options on AUD/USD could be one way to position for more upside. However, we expect the USD’s decline to be limited, so large bearish bets may be risky. The US economy still looks resilient. Final Q4 2025 GDP growth was a solid 2.5%. That strength could slow the pace of Fed cuts and help put a floor under the USD. Because markets are focused on data releases, volatility may rise around key events like the next payrolls report. Traders could use straddles on major pairs such as EUR/USD to trade potential swings. We are also watching long-term Treasuries. If inflation keeps falling, they may become an attractive hedge again, which could indirectly support the USD’s safe-haven status. Create your live VT Markets account and start trading now.

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Visteon shares rose 6.8% in the last trading session and closed at $104.94 on higher-than-usual volume. Over the past four weeks, the stock is up 0.8%. The move followed news about Visteon’s software-defined tuner technology and its integration of Inntot. The company said this is designed to support multiple digital radio standards on one platform. It could also lower hardware costs and make software updates easier. Visteon is expected to report quarterly earnings of $2.08 per share, down 53.2% year over year. Revenue is projected at $930.62 million, down 0.9% from the same quarter last year. The consensus EPS estimate for the quarter has been revised 1.9% higher over the past 30 days. The article also notes that research links estimate revisions to near-term stock price moves. In the same industry, Innoviz Technologies closed 0.1% lower at $0.95 and is down 14.8% over the past month. Its consensus EPS estimate is -$0.07, unchanged over the past month. That would be a 22.2% improvement versus a year ago, and the stock has a Zacks Rank of #3 (Hold). We saw a similar setup around this time last year, in February 2025. Visteon (VC) was trading near $105, supported by optimism about its software-defined technology, even as the market expected a weak quarter. As of today, February 16, 2026, the stock is much higher at about $118. That supports the long-term positive trend. The software-defined vehicle theme that began gaining traction last year is now a major market driver. The in-car software market is now expected to grow by more than 15% per year, well above earlier forecasts. This makes Visteon’s technology more central for major automakers and shifts how investors value the company, away from a basic parts-supplier view. With the next earnings report coming up, implied volatility is around 40%. That suggests the market expects a 5–7% move in either direction. This is calmer than last year, when uncertainty was higher after major post-pandemic supply chain problems. Expectations today are for continued solid results, unlike early 2025 when investors were focused on a sharp year-over-year decline. For traders looking for a positive earnings surprise or more upside momentum, March or April call options offer a direct way to express that view. A strike price near $120 can provide leverage if the stock breaks above its current resistance. The maximum loss is limited to the premium paid, which helps manage risk if volatility rises. Another approach, for investors who are cautiously bullish or want to benefit from higher volatility, is selling cash-secured puts. For example, selling a March $110 put lets a trader collect premium. If the stock falls, they may be assigned shares at an effective price below today’s level, which can be a good entry point for a long-term position. It’s also worth noting how the sector has split since last year. VC has done well, while Innoviz Technologies (INVZ) has had trouble building momentum and now trades around $1.25, up from below $1 in 2025. This suggests investors currently favor companies that combine software and hardware in an integrated offering, rather than more speculative component-only suppliers.

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ING’s commodities team says a partial rollback of US aluminium tariffs is unlikely to change the market. The 50% tariff on primary aluminium remains in place. The US still has limited smelting capacity and continues to rely heavily on Canadian supply. The proposed changes are expected to focus on derivative products, not primary aluminium. ING says that would keep the Midwest premium high after last year’s tariff increase.

Tariff Scope And Market Impact

ING says tariffs have already reshaped US trade flows. Primary metal has been pushed away from the US, while scrap inflows have increased. It also notes that some Canadian aluminium has been redirected to Europe. ING adds that exchange inventories are effectively near zero. Destocking continues, and there have been reports of large spot enquiries in Q2. It says the physical market is still tight. ING says a rollback limited to derivatives would not meaningfully affect LME pricing and would only slightly reduce the Midwest premium. It also says global aluminium supply remains tight, inventories are low, speculative positioning is elevated, and policy risk is splitting regional markets.

Trading Implications And Regional Spreads

Based on the 2025 analysis, little has changed. The 50% tariff on primary aluminium is still the key driver in the US market. Small tariff tweaks on other products last year had little impact, as expected. This ongoing tariff continues to support a high Midwest premium, holding around 19 cents per pound. That structural tightness keeps US physical prices above LME levels, raising the real cost of metal for US buyers. For traders, this supports long exposure to CME Midwest Premium futures, either as a hedge or as a way to position for continued domestic tightness. Global exchange inventories also point to tight supply. LME stocks are now below 400,000 tonnes, near multi-decade lows. With inventories this low, the market can react sharply to any disruption, making price spikes more likely. One way to express upside exposure while limiting risk is to use call options on LME aluminium. US production has not closed the gap. Annual primary smelting output is still struggling to rise above 900,000 metric tons, while demand is over 5 million tons. That leaves the US structurally dependent on imports, especially from Canada. This deficit supports a bullish view on North American aluminium prices relative to other regions. The main trading theme remains regional price fragmentation. Strategies that target regional spreads—such as going long the Midwest premium while hedging with a short LME futures position—still look attractive. The drivers behind these trades in 2025 are still in place today. Create your live VT Markets account and start trading now.

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The Reserve Bank of New Zealand (RBNZ) is expected to keep the Official Cash Rate unchanged at its first 2026 meeting on 18 February. The RBNZ previously signalled that the rate cut in November was the final move in the easing cycle. The RBNZ has said rates are likely to stay unchanged through 2026. Even so, markets are now pricing in the chance of a rate rise as early as Q3 2026.

Focus On Policy Guidance

Because of this, the main focus is whether the RBNZ shifts its guidance in a more hawkish direction. Any change in language or forecasts could reshape expectations for future rates. With the Reserve Bank of New Zealand meeting this Wednesday, 18 February, the bank is widely expected to hold the cash rate steady. The November 2025 rate cut was flagged as the last cut in that easing cycle. The key issue now is what the bank says about the outlook. Markets are starting to question the RBNZ’s view that rates will stay unchanged throughout 2026. Traders are now pricing in a possible hike by the third quarter. This change follows last month’s data showing quarterly inflation unexpectedly rose to 3.2%, moving above the RBNZ’s 1–3% target band. The market view is that the bank cannot ignore that pressure. The argument for a more hawkish tone is also supported by a stronger-than-expected labour market. Unemployment recently fell to a six-month low of 3.8%. A modest recovery in the housing market adds to inflation concerns. The 2021–2023 tightening cycle is a reminder of how quickly the RBNZ can move when inflation risks build.

Trading Positioning And Volatility

For derivatives traders, this sets up an opportunity to position for a hawkish surprise in the RBNZ’s messaging. NZD call option buying has increased, as it offers a way to back a stronger currency with defined risk. Any sign from the Governor that inflation is a bigger concern could trigger a sharp rise in the New Zealand dollar. The main theme is volatility and the pricing of future rates. Traders are using Overnight Index Swaps to bet the Official Cash Rate will be higher by September than the RBNZ currently forecasts. If the RBNZ even acknowledges the recent strength in the data, it could support those positions. Create your live VT Markets account and start trading now.

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National Bank of Canada analysts expect Canada’s January CPI to be flat month over month. That could pull headline inflation down to 2.3%, with CPI-trim edging lower and CPI-median holding at 2.5%. They tie the flat CPI print to only a small rise in petrol prices. They also expect headline goods spending to drop by 0.5%.

Inflation Outlook And Policy Implications

Beyond inflation, they expect December retail sales to fall and manufacturing to post small gains. They also see housing starts improving, while existing home sales weaken in major cities. On trade, they expect gold exports to lift total exports. They estimate the trade deficit could narrow from C$2.2 billion to C$1.4 billion, as higher imports only partly offset the export increase. January CPI data supports the trend we expected, with headline inflation cooling to 2.4%. Statistics Canada reported this last week. It was close to our 2.3% forecast and extends the clear decline from the highs seen through 2025. This supports the view that the Bank of Canada’s policy is working as intended. With inflation moving closer to the BoC’s 2% target, markets are now pricing in more than a 60% chance of a rate cut by the July meeting. This is also showing up in derivatives, with more buying of call options on Government of Canada bond futures. Positioning like this points to a growing view that the peak in interest rates is behind us.

Market Positioning And Canadian Dollar

This backdrop may put more downward pressure on the Canadian dollar in the coming weeks. We should consider strategies that benefit from a weaker CAD, especially versus the US dollar, where rate-cut expectations are less settled. In 2025, the currency weakened whenever softer-than-expected inflation data hit the market. That pattern could return. The outlook is mixed. The case for weaker consumer demand was also confirmed. Statistics Canada’s latest release showed retail sales for December 2025 fell 0.2%, which fits the view of a cautious consumer going into the new year. A “soft landing”—cooling inflation without a deep recession—could support Canadian equities. That could make income strategies, such as selling put options on the S&P/TSX 60 index, appealing for collecting premium. Create your live VT Markets account and start trading now.

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CCL Products (India) Limited has been in a rising Elliott Wave pattern on the monthly chart since it formed a cycle low near ₹130. From that base, the price has moved up in a five-wave advance within a broader uptrend. The stock is currently in Wave III of this larger cycle. Within Wave III, the structure shows smaller waves (1), (2), (3), (4), and a final (5). The move up has been strong, with fast momentum, shallow pullbacks, and a steady series of higher highs. Wave III now looks close to completion. There may still be some upside ahead, but the risk-reward becomes less attractive as prices rise further. Under Elliott Wave theory, Wave III is usually followed by Wave IV, which is typically a corrective and sideways phase—not a major trend reversal. Wave IV is expected to develop as an A-B-C correction, with at least three swings. This should ease the “stretched” conditions created by the prior rally and help set up the next advance. The long-term uptrend remains intact as long as support near ₹130 holds. After Wave IV finishes, Wave V is expected to begin and push the stock to fresh highs within the same cycle. The recent rally in CCL Products is also showing signs of fatigue as it approaches the ₹875 area. Momentum indicators like the Relative Strength Index (RSI) have stayed above 75 for weeks, which is a classic overbought signal (as seen in the January 2026 data). For derivatives traders, this means starting new long positions at current levels carries much higher risk. A corrective pullback now appears likely. This risk increased after the latest quarterly results showed slightly slower growth in export volumes. We expect this consolidation phase could pull the price back toward the ₹720–₹750 zone in the coming weeks. Traders may consider buying put options with March or April 2026 expiries to position for this potential dip. A similar setup appeared in the second half of 2025, when the stock fell about 20% before the main uptrend resumed. This next decline should be seen as a normal reset, not a breakdown. It may create the next high-probability entry window. Once the A-B-C correction looks complete, traders should get ready for the next upward leg. At that stage, they can begin accumulating longer-dated call options or selling cash-secured puts near key support levels. The aim is to be positioned for the Wave V rally, which is expected to take the stock to new all-time highs later in the year.

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Dixon Technologies (India) Ltd bounced from an Elliott Wave support area after a correction. This move suggests Wave IV may be complete and a new upward Wave V may be starting. Wave IV is described as ending inside a support zone between the 50% and 61.8% Fibonacci retracement of Wave III. The pullback followed a corrective ((A))-((B))-((C)) pattern and finished within this zone. Price then turned higher from the same area. In this framework, that rebound is a trend-continuation signal. The next phase is labeled Wave V, with smaller pullbacks expected inside it as wave ((1)) and ((2)) sequences. Two Fibonacci-based targets are set for Wave V. The minimum target is 21,528, based on a 1.236 external retracement of Wave IV. This is described as about 80% upside from recent levels. An extended target is near 24,800. The setup stays valid while price holds above the blue box support zone. A sustained break below that zone would mean the wave count should be reviewed. The bullish structure has played out as expected, with price rising strongly from the major support zone formed last year. That rebound supports the view that corrective Wave IV has ended, and the market is now showing early signs of a strong Wave V advance. The price action since late 2025 also supports the idea that institutional buying took place inside that key Fibonacci support area. Recent fundamentals add support to the technical view. In its Q3 earnings release last month, the company reported 22% year-over-year revenue growth. This growth was driven by new contracts in the mobile manufacturing division and continued benefits from the government’s Production-Linked Incentive (PLI) scheme. The market appears to be pricing in continued operating strength. With current momentum, implied volatility in near-term options has started to rise, which makes buying calls more expensive. Short-term dips or sideways moves may offer better entry prices for bullish positions. The brief pullback in the final quarter of 2025 is viewed as a typical wave ((2)) setup, which provided a good entry before the current acceleration. Over the next few weeks, call options expiring in April or May offer a direct way to target the expected uptrend. Traders may also consider bull call spreads to reduce upfront cost and limit risk, which can be useful after a sharp move higher. These strategies aim to capture upside as the stock moves toward the initial 21,528 target. The broader outlook still points toward the 24,800 area, though this likely plays out over several months. The main risk is a drop back below the key support zone from last year. As long as price stays above that level, the bias remains upward.

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The Euro slipped against the Pound on Monday. EUR/GBP traded near 0.8689 and stayed inside its week-old range. Trading volumes were light. Eurostat said Eurozone industrial production fell 1.4% month on month in December. That was slightly better than the -1.5% forecast. It followed a previous 0.3% rise, revised down from 0.7%. Year on year, output rose 1.2%, below the 1.3% forecast and down from 2.2% previously.

Euro Liquidity Backstop

Reuters said the ECB will let central banks outside the Euro area borrow Euros using euro-denominated collateral. Under the new arrangement, they can borrow up to €50 billion against euro-denominated, marketable assets. In the UK, markets are waiting for jobs data on Tuesday. CPI, PPI, and the Retail Price Index are due on Wednesday. Markets currently price in about a 65% chance of a Bank of England rate cut in March. In the Eurozone, attention turns to Tuesday’s ZEW Economic Sentiment survey and Germany’s CPI data. These reports may drive short-term moves in EUR/GBP. Earlier in 2025, the Eurozone industrial sector looked fragile, while markets expected the BoE to cut rates by March. That dovish BoE view helped keep EUR/GBP stuck in its range. However, those UK rate cuts did not happen. Sticky inflation forced the BoE to hold its line.

Policy Divergence And Trading Implications

Over the past year, the data proved many of the market’s 2025 assumptions wrong, especially for the UK. UK core inflation, reported by the Office for National Statistics, stayed above 3.5% through the end of 2025. As a result, the BoE kept Bank Rate at 5.25%. This has diverged from the European Central Bank, which has sounded more dovish due to weak growth. That policy gap has been the main driver of price moves. As a result, EUR/GBP has broken below its old range and is now trading closer to 0.8550. The Eurozone economy has not improved much. Flash GDP for Q4 2025 showed just 0.2% growth. This weak backdrop supports the ECB’s cautious tone and adds to the Euro’s weakness versus the Pound. For derivatives traders, this clear policy split supports a strategy of selling EUR/GBP rallies. One approach is to buy three-month put options to benefit from more downside, especially ahead of key inflation releases. Volatility has been low, which makes option premiums relatively cheap for positioning for a further drop. The main risk is a sudden change in UK data that gives the BoE room to signal rate cuts. For that reason, UK wage growth and services CPI will be key to watch. If they soften, EUR/GBP could jump on short covering. Defined-risk trades, such as put spreads, may be safer than outright short futures. Create your live VT Markets account and start trading now.

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TD Securities expects UK headline inflation to slow to 3.1% year-on-year in January, down from 3.4% in December. It sees core inflation at 3.2% year-on-year, unchanged. The firm says headline inflation should fall mainly because of base effects in food and energy. It expects services inflation around 4.4% year-on-year, and core goods inflation at 1.0% year-on-year.

Uk Labour Market Stabilisation

TD Securities expects the unemployment rate to stay at 5.1%. It notes this is the highest level since 2021, but recent employment data suggests the labour market is starting to stabilise. The firm expects wage growth to slow across measures. It sees private sector pay growth easing toward 3.25%. January 2026 inflation data showed headline CPI falling to 2.9%, which broadly confirms the cooling trend we expected last year. However, core inflation stayed firm at 3.3% because services inflation remains high. This split is keeping the Bank of England cautious, as shown in its recent comments. Because core inflation is still sticky, interest rate markets have pushed back the first BoE rate cut. Markets now price the first cut for August, not May. We should consider selling short-dated SONIA futures, especially the June and September 2026 contracts, to position for rates staying higher for longer. This trade benefits if the BoE keeps policy unchanged through the first half of the year.

Sterling Range Trading

For sterling, this creates a mixed outlook and should limit big one-way moves. That could keep GBP/USD trading in a range. Selling volatility may be the best approach, using an iron condor or a simple strangle on GBP/USD options. One-month implied volatility has already fallen from above 9% in late 2025 to around 7.8%, and we expect it to edge lower. The labour market story supports this view. The latest ONS data shows unemployment has held near 5.0% for two straight quarters. This reduces the pressure on the BoE to cut rates quickly, similar to the policy pause seen in 2019. That supports the case for range-bound FX moves and steady short-term rates. Create your live VT Markets account and start trading now.

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US gas futures briefly rose above $7/MMBtu during Winter Storm Fern, then dropped below $3/MMBtu. Storage levels stayed close to the ten-year average. Lower carbon prices reduce the cost of coal power generation. As a result, the same amount of gas-to-coal switching can happen at a lower gas price. This points to lower European gas prices in the near term.

Global Lng Supply Outlook

Global LNG supply is expected to grow, which could create a period of oversupply. That could push European gas prices lower until global supply and demand rebalance. It may also include a temporary closure of the US LNG export arbitrage. US, European, and Asian (JKM) gas benchmarks tend to follow similar seasonal demand patterns, such as winter heating and summer cooling. This supports continued long-term price correlation across these regions. Based on forward curves dated 14 February 2026, LNG export profitability is expected to fade to near zero by 2027 under current forward prices, exchange rates, and arbitrage costs. This outcome was also forecast in 2023, with arbitrage closure repeatedly projected on a similar timeline. US natural gas futures have fallen back below $3/MMBtu after a brief winter spike. This fits with current market fundamentals. The latest Energy Information Administration (EIA) report shows working gas in storage at 2,150 Bcf, which is in line with the five-year average for mid-February. With supply comfortable, any weather-driven rallies are likely to be short-lived and may offer selling opportunities.

European Gas Price Drivers

The outlook for European gas prices appears weaker. It is being weighed down by both rising global LNG supply and lower carbon prices. With European Union Allowances (EUAs) near €45 per tonne—well below the highs seen in prior years—coal-fired generation becomes more competitive. This can reduce gas demand from the power sector and limit how far TTF prices can rise. More LNG supply is also strengthening the link between US, European, and Asian gas markets. Price correlations between Henry Hub, TTF, and JKM are likely to increase, especially as new export capacity—such as Qatar’s North Field East—starts up later this year. Traders should watch inter-basin spreads, since the extreme price gaps seen in 2022 look less likely to persist. Forward curves suggest the arbitrage to ship US LNG to Europe could effectively close by 2027. If that happens, longer-dated European gas contracts may be priced too high relative to US contracts. One way to express this view is to take bearish positions in calendar 2027 TTF futures or to sell call options in that tenor, aiming to benefit from expected price convergence. Overall, this points to a market with structurally lower volatility in the years ahead. As LNG flows help balance regional markets more smoothly, sharp price swings may become less common. This environment can favor strategies designed for range-bound pricing or falling implied volatility, such as selling strangles or using calendar spreads. Create your live VT Markets account and start trading now.

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