GBP/USD rose for a fifth day in a row, trading near 1.3560 in early European hours on Thursday. The pair stayed firm as the US Dollar weakened, with markets unsettled by uncertainty over White House economic policy. In his State of the Union address on Tuesday, US President Donald Trump said the US economy is rebounding. He defended tariffs as helping growth and criticised the Supreme Court for striking down part of his tariff policy.

BoE Rate Cut Expectations

Further gains in GBP/USD may be capped by expectations that the Bank of England will take a more dovish path. Markets are leaning toward an interest rate cut in March, driven by a softer UK labour market and easing inflation. MPC member Alan Taylor said two to three near-term rate cuts could be needed, pointing to risks to employment and easing price pressures. UK CPI inflation fell to 3.0% in January from 3.4% in December. That was the lowest level since mid-2025 and a larger drop than expected. BoE Governor Andrew Bailey told Parliament’s Treasury Committee that a March cut is “a genuinely open question”. He noted services inflation was 4.4% in January versus the BoE projection of 4.1%. Meanwhile, Chief Economist Huw Pill warned against being “beguiled” by headline inflation moving closer to the 2% target. GBP/USD is holding up for now, mainly because uncertainty around US economic policy is weighing on the dollar. That dollar weakness is giving the pound short-term support and keeping the pair near 1.3560. However, the setup looks fragile and may create a clear trading opportunity.

Historical Sterling Reaction

The key issue is the strong expectation that the Bank of England will cut rates in March. The January inflation drop to 3.0%, which was sharper than forecast, reinforces this view. Market pricing from Overnight Index Swaps now points to a more than 70% chance of a 25-basis-point cut next month. History also matters. In past easing cycles, such as 2020, Sterling often came under pressure after the first rate cut. That differs from much of 2025, when the pound was relatively steady as policy stayed on hold. This pattern suggests Sterling may have more downside once a cut is confirmed. On the other side, the US dollar’s weakness is being driven by politics and headlines, including Trump’s tariff comments in the State of the Union address. While that uncertainty is supporting GBP/USD for now, US data has remained firm. For example, job reports from early February 2026 still showed a tight labour market, which makes the case for a weaker dollar less clear-cut. Given this backdrop, traders may want to prepare for a fall in GBP/USD ahead of the March central bank meeting. One approach is to buy GBP/USD put options, which can benefit from a decline while limiting losses if dollar weakness unexpectedly deepens. Recent Commodity Futures Trading Commission (CFTC) data also shows large speculators have increased net short positions in Sterling in recent weeks. Create your live VT Markets account and start trading now.

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GBP/JPY slipped 0.3% to around 211.30 in early European trading on Thursday, after rising in the previous two sessions. The drop followed comments from Bank of Japan (BoJ) Governor Kazuo Ueda, which kept the door open for more rate hikes. Ueda told the Yomiuri newspaper on Tuesday that the BoJ will review data at its March and April meetings before deciding whether to raise rates this year. He said the bank will keep lifting rates if its economic and inflation outlook is increasingly likely to be met.

BoJ Signals And Policy Uncertainty

A Mainichi report on Tuesday said Japan’s Prime Minister, Sanae Takaichi, does not support further BoJ rate hikes. The report cited a meeting between Takaichi and Ueda on 16 February. New nominations to the BoJ’s nine-member board—Toichiro Asada and Ayano Sato—have also increased uncertainty about the bank’s future policy direction. Sterling was mostly steady. Even so, traders still expect a Bank of England rate cut at the March meeting, following weaker UK jobs data and easing inflation. MPC member Alan Taylor said earlier this week that two to three rate cuts may be needed soon. The BoJ targets inflation at about 2%. It launched quantitative and qualitative easing (QQE) in 2013, added negative rates and yield-curve control in 2016, and raised rates in March 2024 after inflation moved above target. With GBP/JPY now trading near 225.00, there are similarities to what happened in 2025. At that time, the pair briefly fell toward 211.00 after similar talk of BoJ tightening. This suggests that BoJ “verbal intervention” often causes short-lived dips that many traders treat as buying opportunities. Ueda’s early-2025 hints about rate hikes led to only two small increases across the whole year, as political pressure limited more aggressive moves. With Japan’s latest core inflation for January 2026 coming in at a softer 1.8%, we expect the BoJ to remain cautious in the near term. That implies any Yen strength driven by these headlines may not last long.

Pound Yen Outlook And Options Positioning

On the other side of the pair, the Bank of England did go ahead with the rate cuts discussed in early 2025, cutting its main rate three times during that year. However, with UK inflation proving sticky—holding at 2.5% in the latest reading—the market is no longer pricing in more cuts in the first half of 2026. This policy gap supports a stronger fundamental outlook for the Pound versus the Yen. Over the next few weeks, this points to continued upward momentum in GBP/JPY. Long call options could be a practical way to gain from potential upside. Given the history of sharp but temporary pullbacks after BoJ comments, selling out-of-the-money puts may also be a way to earn premium. This strategy fits the view that the main trend remains higher, even if short-term volatility increases. Create your live VT Markets account and start trading now.

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EUR/GBP rose to around 0.8715 in early European trade on Thursday, moving above 0.8700. The pair climbed as UK political risk pressured the Pound. Markets were also focused on a speech from ECB President Christine Lagarde later in the day. Manchester’s Gorton and Denton constituency is holding a by-election on Thursday to fill a vacant seat. Investors are watching the vote as a key test for Prime Minister Keir Starmer, following reports of internal party tensions and low approval ratings.

Eurozone Inflation And ECB Focus

In the Eurozone, inflation slowed to 1.7% year on year in January, the lowest in 16 months. Traders are also waiting for Germany’s preliminary CPI on Friday, which could shift expectations for ECB policy. The Pound Sterling dates back to 886 AD and is the UK’s official currency, issued by the Bank of England. It is the fourth most traded currency and accounts for about 12% of global FX turnover, or roughly $630 billion a day (2022 data). Major Sterling pairs include GBP/USD (11% of FX turnover), GBP/JPY (3%), and EUR/GBP (2%). Sterling is driven by Bank of England policy, which targets inflation near 2%, and by data such as GDP, PMIs, employment figures, and the trade balance. At this time in 2025, EUR/GBP was pushing above 0.8700, mainly due to political uncertainty around the UK government. The Manchester special election was viewed as a major test for the Prime Minister, adding pressure to the Pound. Concerns about domestic stability were a key headwind for the currency.

Shift In The 2026 Policy Divergence

Fast forward to today, February 26, 2026, and the picture has changed. The pair is now trading closer to 0.8650. UK inflation, reported last week for January, remains sticky at 2.5%. This keeps pressure on the Bank of England to hold its 5.25% bank rate. That is different from a year ago, when Eurozone inflation was falling quickly. In the Eurozone, inflation has steadied. The latest Harmonised Index of Consumer Prices (HICP) for the euro area is 1.9%. With inflation near the ECB’s target, markets see a higher chance the ECB cuts rates before the Bank of England does. This expected policy gap is now the main driver of the pair. For derivatives traders in the weeks ahead, this points to a volatility trade. With both central banks staying data-dependent, buying option straddles ahead of the March policy meetings may be a practical way to capture a sharp move. A straddle benefits if price moves strongly in either direction, which could happen if one bank signals a clearer path than the other. The next data releases will matter. Traders will focus on preliminary February inflation prints and the UK’s annual budget statement. Any surprise in UK wage growth or German economic sentiment could break the current tight range. One-month option implied volatility has risen from 5.2% to 5.8% over the past week, suggesting the market is preparing for a larger move. Create your live VT Markets account and start trading now.

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Gold prices in Pakistan rose on Thursday, according to FXStreet data. Gold was priced at PKR 46,482.28 per gram, up from PKR 46,100.03 on Wednesday. Per tola, gold climbed to PKR 542,159.10 from PKR 537,701.70 the day before. Other listed rates were PKR 464,821.90 for 10 grams and PKR 1,445,762.00 per troy ounce.

Gold Pricing Method

FXStreet estimates local gold prices by converting global prices using the USD/PKR exchange rate and local units of measure. The numbers are updated daily using market rates at the time of publication. Local prices may vary slightly. Gold is used as a store of value and for jewellery. Many investors also use it to diversify during market stress. It can also help protect against inflation and weaker currencies. Central banks hold large gold reserves. In 2022, they added 1,136 tonnes, worth about $70 billion, according to the World Gold Council. This was the biggest annual increase since records began. Gold often moves in the opposite direction to the US Dollar and US Treasuries. It can also move differently from risk assets. Prices may react to geopolitics, recession worries, and interest rates, since gold does not pay interest.

Market Outlook

Based on today’s date, gold’s key drivers suggest ongoing volatility, with room for gains in the weeks ahead. Recent changes in Federal Reserve messaging have raised the odds of future rate cuts after US Q4 2025 GDP growth came in at a modest 1.8%. This adds uncertainty. In such conditions, traders may look at strategies that can benefit from large moves, such as buying straddles on major gold ETFs. Gold’s role as a hedge against weaker currencies remains important, especially in emerging markets. In 2025, countries such as Pakistan dealt with inflation averaging above 20%. That helped boost local demand for gold as a store of value. This support can strengthen the bullish case and makes long-dated call options one way to position for the trend. Institutional demand also gives gold a strong base. Central banks kept buying through 2025, adding more than 950 tonnes to global reserves, the second-highest yearly total on record. This steady buying, driven by efforts to diversify away from the dollar, suggests pullbacks may not last long. For income-focused traders, selling cash-secured puts on gold miners or related ETFs is one possible strategy. Geopolitical risk is another factor that can support prices. Ongoing trade tensions and regional conflicts can keep investors cautious, which helps gold’s safe-haven appeal. Traders may use out-of-the-money call options as a lower-cost way to hedge against a sudden rise in global tensions. Gold’s inverse link to the US Dollar also matters. As markets price in a more dovish Fed later this year, the Dollar Index (DXY) has already dropped 3% from its late-2025 highs, which supports gold. If the dollar keeps weakening, traders may build bullish exposure through futures or by using bull call spreads to cap risk. Create your live VT Markets account and start trading now.

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USD/CHF fell for a fifth straight day and traded near 0.7720 during Asian hours on Thursday. The Swiss Franc rose on safe-haven demand as trade tensions picked up again. Donald Trump moved ahead with new 10% tariffs on trading partners, even after the US Supreme Court blocked part of his proposed duties. In his State of the Union address, he said the US economy is recovering, argued that tariffs support growth, and criticised the Court’s decision. The Swiss Franc also got support as markets scaled back expectations for near-term Swiss National Bank rate cuts. Swiss inflation was unchanged at 0.1% in January. That is within the SNB’s 0–2% target range and matches its first-quarter outlook. The Swiss ZEW Expectations Index rose to 9.8 in February from -4.7 in January. This was its second-highest level since January last year. It also supports expectations that the SNB policy rate will stay at 0% through 2026. Markets are watching Switzerland’s Q4 employment data due later on Thursday, and Q4 GDP on Friday. In the US, weekly initial jobless claims are due during the North American session. We still see the Swiss Franc holding firm as trade talks between the US and the European Union keep markets on edge. This is similar to the safe-haven buying seen during the tariff disputes in early 2025. USD/CHF is now near 0.8850, well above last year’s lows, but selling pressure is starting to build again. The Swiss National Bank is giving little reason to expect a shift away from its tight policy stance, which supports the franc. Swiss inflation for January 2026 came in at 1.2%. That is still within the SNB’s target range and well above the 0.1% seen at the start of last year. With the SNB’s next meeting in March, markets expect the policy rate to stay at 1.75%. On the US side, recent data points to slower momentum, which could weigh on the dollar. The latest Non-Farm Payrolls report showed job growth of 185,000, below forecasts, and January inflation eased to 2.9%. This gap—steady conditions in Switzerland and a softer US outlook—supports the case for a lower USD/CHF. In the weeks ahead, we think traders should look at strategies that limit exposure to a move higher in the pair. One option is to buy USD put options with a strike below the 0.8800 support level. This offers a defined-risk way to position for a potential drop. It lets traders benefit if the pair falls, while limiting the maximum loss to the premium paid. We also remember the steep fall during the 2025 trade tensions, when the pair dropped below 0.8000. Today’s tensions are different, but the pattern is familiar: in uncertain times, investors often move into the Swiss Franc. Past volatility in these periods suggests that even small changes in geopolitical sentiment can trigger big moves in this pair.

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EUR/USD rose for a second day and traded near 1.1830 in Thursday’s Asian session. The US dollar stayed weak as traders worried about the economic impact of US President Donald Trump’s trade policies. The RSI is 56. This points to improving upside momentum, but it is not yet overbought. Earlier, the RSI was below 30. The MACD line is slightly above the signal line and just in positive territory, with a small positive histogram.

Near Term Technical Outlook

The move higher stalled near the 100-period SMA on the 4-hour chart. A clean break above this level could push the pair toward 1.1860, then 1.1900. Support is near 1.1790, followed by 1.1760, where the latest bounce started. Staying above 1.1790 keeps the bullish bias in place. A drop below 1.1760 would weaken the rebound and suggest a broader range. The technical analysis was produced with the help of an AI tool. EUR/USD is showing modest strength and is trading around 1.0750. This follows recent European Central Bank comments that kept rates at 2.75% but signaled possible cuts ahead. That contrasts with the US Federal Reserve’s firmer stance at 3.50%. This policy gap is the main factor driving the current market tension.

Key Levels And Trading Approach

We have seen similar policy-driven uncertainty before. For example, trade disputes in the late 2010s led to sharp and uneven swings. More recently, in 2025, the pair dropped quickly after an unexpected Fed rate hike. These episodes show that even when price is moving sideways, major news can still trigger a strong breakout. Technically, the Relative Strength Index (RSI) is near 52, which signals a neutral market with limited momentum. The MACD is also flat and close to its signal line. This supports the view that neither buyers nor sellers are in clear control. As a result, it makes sense to wait for a stronger signal before taking a directional trade. A key level to watch in the coming weeks is the 50-day Simple Moving Average at 1.0790. A sustained break above it would suggest fresh bullish strength and could open a move toward resistance at 1.0850. Traders could then consider short-term call options to benefit from the upside follow-through. On the downside, initial support is at 1.0720, which has held on recent pullbacks. A clear close below 1.0720 would suggest rising bearish pressure, possibly helped by a wider interest rate gap. If that support breaks, traders may look at put options targeting the 1.0650 area. For now, the safest approach is to wait for a confirmed break out of this range. The latest US inflation data showed CPI still high at 2.9%, which may support the dollar. Opening new derivative positions before price clearly moves through 1.0790 or 1.0720 adds unnecessary risk. The market is still waiting for its next major catalyst, so trading plans should reflect that patience. Create your live VT Markets account and start trading now.

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Gold prices rose in India on Thursday, according to FXStreet data. Gold was priced at INR 15,217.13 per gram, up from INR 15,092.72 on Wednesday. The price per tola increased to INR 177,489.60 from INR 176,038.50 a day earlier. Other listed rates were INR 152,171.30 for 10 grams and INR 473,306.00 per troy ounce.

How FXStreet Calculates Indian Gold Prices

FXStreet calculates Indian gold prices by converting international prices using USD/INR, then applying local measurement units. The figures are updated daily at the time of publication and are for reference only. Local rates may differ slightly. Central banks hold more gold than any other group. According to the World Gold Council, they added 1,136 tonnes—worth about $70 billion—to reserves in 2022. That was the biggest annual purchase since records began. Gold often moves in the opposite direction of the US Dollar and US Treasuries. It may also move against risk assets. Key influences include interest rates, recession worries, and geopolitical instability. The post says an automation tool was used to create it.

Key Drivers Traders Are Watching

Gold prices are rising, which fits its long-standing role as a hedge during uncertain times. This move is being helped by a US Dollar that has eased from the highs of the past year. Derivatives traders should keep this inverse relationship in mind as a useful signal going forward. Markets are also responding to expectations that the US Federal Reserve will cut interest rates later this year. After the sharp rate hikes of 2023 and 2024, the tightening cycle now appears to be ending. That can make a non-yielding asset like gold more appealing. CME FedWatch Tool data currently points to a 70% chance of at least two rate cuts before 2027, showing a meaningful shift in expectations. Central-bank demand remains strong as well. After the record buying in 2022, the World Gold Council reports that central banks bought more than 1,000 tonnes per year in both 2023 and 2024, and other reports indicate the trend continued through 2025. This steady demand can help support gold prices over the long term. Global growth is also showing signs of slowing. Recent IMF forecasts were revised lower for the second half of 2026. The risk of slower growth, combined with ongoing geopolitical tensions, increases gold’s safe-haven appeal. A similar pattern played out in 2025, when stock-market volatility pushed more investors toward gold. With these factors in mind, some traders may look at long positions using futures to benefit from further upside. Options traders might consider buying call options or using bull call spreads to limit risk while positioning for higher prices. It is also worth watching volatility, as rising volatility can signal stronger market conviction. Create your live VT Markets account and start trading now.

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USD/JPY pulled back from the 156.80–156.85 area, a two-week high, and slipped to around 155.75 during Thursday’s Asian session. This ended a two-day rally after sellers stepped in. The Japanese Yen strengthened following hawkish comments from Bank of Japan officials, which reinforced expectations of more policy tightening. The Yen also found support from trade uncertainty and geopolitical risks ahead of US-Iran nuclear talks, along with mild US Dollar softness.

Technical Support In Focus

The decline paused near 155.75. This level is where the 200-period simple moving average on the 4-hour chart aligns with the 23.6% Fibonacci retracement of the 152.34–156.85 move. A clean break below this area could lead to more downside. The next supports are the 38.2% Fibonacci retracement at 155.15, followed by the 50.0% level at 154.60. If the sell-off continues, the 61.8% retracement at 154.06 could come into view. The RSI is near 55 after failing to hold close to 70. The MACD line is just above the signal line near zero, suggesting weak directional momentum. The Bank of Japan targets inflation near 2%. It introduced QQE in 2013, added negative rates and yield control in 2016, and raised rates in March 2024.

Shift In Macro Backdrop

Back in 2025, USD/JPY repeatedly tested 155.75, which was a key support zone at the time. Today, the picture looks very different. The US-Japan interest rate gap has narrowed sharply, and market conditions have changed as the Bank of Japan continued to normalize policy. The BoJ’s shift began with its first rate hike in March 2024 and has remained a major driver. Since then, it has made a few more small moves in response to domestic inflation, which has stayed above the 2% target for most of the past 18 months. As of January 2026, Japan’s core inflation was 2.3%, supporting the central bank’s tighter stance. On the US side, the Federal Reserve has been easing policy as inflation cooled. US core inflation is now closer to 2.5%, well below the levels seen in 2024 and 2025. This has given the Fed room to cut rates several times. As a result, the policy gap has flipped, adding steady downside pressure on the dollar versus the yen. For traders, this backdrop makes aggressive USD/JPY bullish bets more risky. Consider positions that benefit from further yen strength, such as buying JPY calls or USD puts. Another approach is selling out-of-the-money USD/JPY call spreads to generate income while keeping the view that upside may now be limited. The main technical level to watch is the 200-day moving average, near 144.50. A decisive break below it could trigger another wave of selling and bring the 140.00 psychological level into focus. A strong rebound may be hard to sustain as long as the narrowing rate differential story remains in place. Create your live VT Markets account and start trading now.

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S&P 500 E-Mini Futures (ES) has mostly moved sideways, with a slight upward bias, since October 2025. A short-term cycle from the 21 November 2025 low is still developing as a five-wave Elliott Wave move. Wave 1 ended at 7043, the index’s all-time high. Price then fell in a zigzag: wave ((a)) ended at 6864.5 and wave ((b)) ended at 7011.5.

Wave Structure And Key Levels

Wave ((c)) dropped to 6791.6, which completed wave 2 at a higher degree. From 6791.6, the index turned up into wave 3. However, the market still needs a break above 7043 to rule out a larger double correction. From the wave 2 low, wave (i) rose to 6925.75, then wave (ii) fell to 6828.5. In the near term, 6791.6 is the key pivot. Any pullback should hold above this level, ideally within a 3-, 7-, or 11-swing sequence. Momentum is still tilted higher, but the bullish case needs confirmation from a sustained move above 7043. Based on the late-2025 analysis, ES is in a constructive, but still unconfirmed, uptrend. The sideways trade since 7043 has helped build a base for a potential third wave higher. For traders, the main focus is the 6791.6 pivot. It must hold to keep the bullish outlook valid.

Options Positioning For Breakout And Support

With this setup, one possible strategy for the coming weeks is selling out-of-the-money put credit spreads with the short strike below the 6791.6 pivot. With the VIX recently near 14, option premiums are still reasonable for trades that benefit from time decay and from the market staying stable or moving higher. This fits the view that dips should find support as long as the key low holds. For traders looking for a confirmed breakout, building long exposure with bull call spreads aimed at a move above 7043 can make sense. This limits risk while positioning for the larger upside move expected in a third wave. A strong close above the prior high would likely bring in new buying and speed up the advance. This technical setup is also supported by recent January 2026 fundamentals: core inflation cooled to 2.8%, and job growth came in at a steady (but not overheating) 195,000. This lowers the risk of unexpected central bank moves and supports the market’s underlying tone. In past examples, such as Q2 2023, long periods of quiet sideways action have often been followed by strong, sustained trends. Even so, discipline is critical. A break below 6791.6 would invalidate this bullish wave count. That would point to a larger double correction and require a quick shift to a defensive or bearish stance. In that case, traders would likely need to exit bullish positions and consider buying puts for downside protection. Create your live VT Markets account and start trading now.

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NZD/USD rose for a third straight day and traded near 0.6000 in Asian hours on Thursday. The pair moved higher as the US Dollar stayed weak, with markets still unsure about White House economic policy. In Tuesday’s State of the Union address, President Donald Trump said the US economy is rebounding. He defended tariffs and criticised the Supreme Court for striking down part of his tariff policy.

Imf Sees Tariffs Adding To Inflation

IMF Managing Director Kristalina Georgieva said US goods inflation has been driven in part by tariffs. She said moving the federal funds rate toward 3.25%–3.50% would be consistent with a return to full employment. She also said public debt will need firm fiscal action to get onto a clear downward path. In New Zealand, the ANZ Business Confidence Index fell to 59.2 in February from 64.1 in January. The ANZ Activity Outlook rose to 52.6 from 51.6. Inflation expectations climbed to 2.93% from 2.77%, the highest since April 2024. RBNZ Governor Anna Breman said inflation is expected to return to the target range in the first quarter of this year. She said progress toward 2% inflation has been uneven. We see the US Dollar’s weakness as a direct result of continued political uncertainty around tariff policy. The latest US inflation data for January 2026 showed prices still rising 3.4% year over year. This supports the view that tariffs are keeping inflation sticky. In this environment, we are reluctant to hold large long positions in the US Dollar.

Policy Divergence And Market Volatility

The IMF’s call to cut the federal funds rate toward 3.25% highlights a key problem: tariffs can push inflation up, while lower rates would add stimulus. With the Fed currently at 4.00%, a move down to that range would be a major dovish shift. This tension is a major source of uncertainty and could keep pressure on the dollar in the weeks ahead. In contrast, New Zealand’s backdrop is more supportive for the Kiwi. Inflation expectations have risen to 2.93%, and official Q4 2025 inflation was 3.1%, still above the central bank’s target. That makes it less likely the Reserve Bank of New Zealand will move quickly toward easier policy. For derivative traders, this policy gap argues for NZD/USD call options. This can position for further upside, with strike prices above 0.6000, such as 0.6050 or 0.6100. This provides upside exposure while keeping risk capped if US policy clarity improves suddenly. Mixed signals may also lift market volatility. A US administration leaning toward tariffs, alongside the possibility that the Federal Reserve may need to cut rates, could create larger swings in NZD/USD. Strategies that benefit from higher implied volatility may also work well. We saw a similar setup in 2022–2023. Currencies backed by more aggressive, inflation-fighting central banks tended to outperform those where policy direction was less clear. History shows rate differentials can be a powerful driver in FX. This strengthens our view that the Kiwi is well placed to gain against the US Dollar. Create your live VT Markets account and start trading now.

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