USD/CAD dipped to around 1.3695 in early European trading on Friday. The Canadian Dollar strengthened as crude oil prices rose. Markets were waiting for Canada’s Retail Sales data, plus the US advance Q4 GDP report and the US PCE Price Index. Geopolitical risks pushed oil higher and supported the oil-linked Canadian Dollar. US President Donald Trump said Iran had 10 to 15 days to reach a deal on its nuclear programme. He warned of “really bad things” if no deal is reached.

Oil Prices Support Canadian Dollar

US data also moved the pair. Strong US numbers can lift the US Dollar and reinforce a more hawkish Federal Reserve view. US Initial Jobless Claims fell to 206,000 for the week ending February 14. That was below the 225,000 forecast and down from the prior week’s revised 229,000. Later on Friday, traders were set to watch the US PCE inflation data for December and a preliminary Q4 GDP reading. If these come in weaker than expected, the US Dollar could soften in the near term. The Canadian Dollar is shaped by several factors, including Bank of Canada interest rates, oil prices, growth, inflation, and the trade balance. The BoC targets inflation between 1% and 3%. It can also use quantitative easing or tightening to influence credit conditions. USD/CAD is showing weakness near 1.3700 as the Canadian Dollar gets support from higher oil prices. This sets up a clear tug-of-war: stronger commodities versus a still-firm US Dollar. Volatility may stay elevated as these forces compete in the weeks ahead. The loonie is getting help from ongoing energy supply concerns. West Texas Intermediate crude is holding above $82 per barrel. As seen during periods of Persian Gulf tension in 2025, geopolitical risk can lift oil prices quickly. At the same time, OPEC+ production discipline is helping keep prices firm. Since Canada is a major oil exporter, higher oil prices are a fundamental boost for the Canadian Dollar.

Key Drivers To Watch Ahead

The US Dollar, however, continues to benefit from a solid US economy and a cautious Federal Reserve. Recent data has kept jobless claims near 210,000. The latest Core PCE inflation reading for January was 2.9%, slightly above expectations. While inflation is easing, it remains sticky enough for markets to dial back expectations of aggressive Fed rate cuts in 2026. Next, traders will focus on Canada’s monthly GDP data and the next Bank of Canada policy meeting for local signals. In the US, the early-March Non-Farm Payrolls report will be a key release and could shift expectations for Fed policy. These events may become major drivers of the USD/CAD exchange rate. This push and pull between a hawkish Fed and strong oil prices suggests USD/CAD could stay range-bound, but still swing sharply on surprise data. That backdrop can suit options strategies that target volatility or defined ranges ahead of major releases. Avoid chasing breakouts until one side of the story becomes clearly dominant. Market moves in 2025 were a reminder of how fast sentiment can change. Surprise inflation data pushed the Fed toward a “higher for longer” message, and the US Dollar strengthened quickly. Traders who were not prepared for both sides of the USD/CAD narrative were punished. A similar setup may be forming now, which calls for flexibility. Create your live VT Markets account and start trading now.

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Gold prices in Saudi Arabia fell on Friday, according to FXStreet data. Gold traded at SAR 601.91 per gram, down from SAR 603.25 on Thursday. Gold also fell per tola to SAR 7,020.53, from SAR 7,036.23 the day before. Other listed prices were SAR 6,019.11 for 10 grams and SAR 18,721.43 per troy ounce.

Saudi Gold Price Snapshot

FXStreet converts global gold prices into Saudi Riyals using the USD/SAR exchange rate and local units of measure. Prices are updated daily using market rates at the time of publication, and local prices may differ slightly. Gold is widely used in jewellery. Many people also see it as a store of value and a way to exchange wealth. It is often used to hedge against inflation and a weaker currency because it is not issued by any single government. Central banks hold large gold reserves to diversify. In 2022, they bought 1,136 tonnes worth about $70 billion, the highest annual total on record. China, India, and Turkey were among the buyers that increased their reserves. Gold often moves in the opposite direction of the US Dollar and US Treasuries. It can also move differently from risk assets like stocks. Prices can be influenced by geopolitics, recession fears, interest rates, and the strength of the US Dollar, since gold is priced in dollars (XAU/USD).

Macro Drivers Traders Watch

Today’s small dip in gold looks minor when compared with the broader economic backdrop. As of February 20, 2026, the inverse relationship between gold and the US dollar remains the key driver for traders. Most attention is on where interest rates are headed, not on day-to-day price moves. In 2023, the Federal Reserve raised rates aggressively. Rates then stayed on hold through 2024. By 2025, sentiment turned more dovish. Throughout last year, Fed comments often suggested the next move would likely be a cut, which helped weaken the dollar over time. This typically supports gold, since gold does not pay yield. In this setting, long gold futures or call options may look attractive. Inflation worries also continue to support gold, even though headline inflation has eased from its highs. The January 2026 US CPI report showed inflation at 2.9%, above the 2.5% forecast. For traders, this keeps gold’s role as an inflation hedge important, and it can support bullish positions even when equities are strong. Central-bank demand also remains a major support for the market. After buying a near-record 1,037 tonnes in 2023, central banks kept buying. The latest World Gold Council data shows they purchased more than 800 tonnes in 2025. This steady demand can put a floor under prices. Traders may see larger pullbacks as potential buying chances, and some may consider selling put options to collect premium. Geopolitical tensions in several regions still support gold’s safe-haven appeal. This ongoing uncertainty has kept implied volatility in gold options higher than historical averages. Traders should expect that any major escalation could trigger sharp rallies in gold, which tends to benefit strategies that are long volatility. Create your live VT Markets account and start trading now.

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Gold prices in the Philippines fell on Friday, according to FXStreet data. Gold was priced at PHP 9,329.38 per gram, down from PHP 9,349.44 on Thursday. Gold also slipped to PHP 108,816.00 per tola from PHP 109,050.10 the day before. Other listed prices were PHP 93,293.79 for 10 grams and PHP 290,176.10 per troy ounce.

How FXStreet Calculates Local Gold Prices

FXStreet converts global gold prices into Philippine pesos using the USD/PHP exchange rate and local measurement units. The numbers are updated daily using market rates at the time of publication, and local prices may differ. Gold has long been used to store value and as a form of payment. It is also used in jewellery and is often bought to help protect against inflation and a weaker currency. Central banks hold the biggest gold reserves. In 2022, they added 1,136 tonnes worth about $70 billion, according to the World Gold Council. Gold often moves in the opposite direction to the US Dollar and US Treasuries. Prices can also change due to geopolitical risks, recession concerns, and shifts in interest rates.

Market Outlook For Gold In The Coming Weeks

Gold’s small drop today looks like a short-term move, not a change in the overall trend. Over the next few weeks, the bigger driver is likely the US Dollar, which has weakened on expectations of future policy changes. Because gold often moves opposite the dollar, a softer dollar can support gold. We are watching the US Federal Reserve closely as investors look for a shift away from tight monetary policy. Core inflation data for January 2026 stayed above target at 2.8%, which adds uncertainty about when rate cuts may start. When rates are high but expected to fall, gold can benefit because it does not pay interest. Central bank buying also remains a strong support, a trend we followed closely through 2025. After record purchases in 2022, central banks worldwide added more than 800 tonnes to their reserves last year. Steady demand like this can help limit downside, especially when countries are diversifying away from certain currencies. For derivatives traders, one possible approach is buying call options on gold futures to help hedge against an equity market drop. Growing talk of a possible US recession later this year could trigger a move toward safer assets, which may pressure stocks and support gold. Implied volatility on gold options is still moderate, which may offer a chance to position for a potential rise in prices in the second quarter. Create your live VT Markets account and start trading now.

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India’s HSBC Composite PMI slipped to 59.3 in February, from 59.4 in the previous month. That is a 0.1-point drop in the index.

Composite Pmi Signals Slight Slowdown

India’s February composite PMI eased to 59.3, down from 59.4. It still points to strong expansion, but the key takeaway is the small slowdown. This is the first time in five months that growth has not accelerated, which may be an early sign that momentum is leveling off. With January 2026 inflation still high at 5.8%, this dip puts the Reserve Bank of India in a tough spot. Markets have been expecting interest rates to stay “higher for longer,” and this report is unlikely to change that view right away. We should expect the RBI to stay hawkish, which means markets may react quickly to any further signs of slower growth. For derivatives traders, implied volatility could rise. Buying straddles on the Nifty 50 may be worth considering, since the strategy benefits from a large move in either direction—something that is possible in an uncertain setup like this. It also lets us trade the push-and-pull between solid growth and rising slowdown concerns. We should also think about protection for existing long portfolios. Buying out-of-the-money put options can be a low-cost hedge against a pullback if future data confirms cooling momentum. This matters more after the strong rally from late 2025, when many investors may be ready to lock in gains. In 2025, the economy consistently outperformed, with PMI readings often beating expectations and supporting the market. That makes this small dip more meaningful, because it breaks a clear pattern of acceleration. As a result, we should be ready for a stronger market reaction if next month’s data also suggests stabilization or a further slowdown.

Market Reaction And Positioning Considerations

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India’s HSBC Services PMI was 58.4 in February, slightly down from 58.5 in January. The index is still above 50. Readings above 50 show growth in services activity, while readings below 50 signal contraction.

Services Pmi Still Signals Strong Expansion

This small move from 58.5 to 58.4 is not a meaningful bearish signal for India. Any number above 50 indicates expansion, and a level in the high 50s points to strong, fast growth in the services sector. This looks more like a small cooling within a strong trend, not the start of a downturn. This can also be supportive for interest-rate expectations. With January 2026 retail inflation at 5.2%, a slightly slower pace in services activity may reduce pressure on the Reserve Bank of India to raise rates soon. As a result, derivatives markets may price a lower chance of tightening at the RBI’s April policy meeting. For index traders, this may make pullbacks in NIFTY 50 futures more attractive as potential buying opportunities. Similar mild slowdowns in mid-2025 were followed by renewed strength. Selling out-of-the-money NIFTY puts could be one way to collect premium, based on the view that solid economic momentum may help support the index. In FX, a less hawkish RBI could add mild pressure on the Rupee. With USD/INR trading near 83.70, a move toward 84.00 over the coming weeks is possible. Traders could look at long USD/INR futures or call options as either a hedge or a speculative trade.

Potential Implications For Rates Equities And Rupee

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NZD/USD slipped to around 0.5960 in early Asian trade on Friday and later weakened toward 0.5950. The move followed a dovish hold from the Reserve Bank of New Zealand (RBNZ), while traders looked ahead to US data due later in the day. The RBNZ left the Official Cash Rate unchanged at its February meeting, the first decision under Governor Anna Breman. Breman pushed back expectations for the next possible rate hike to late 2026 or early 2027.

Inflation Outlook And Rbnz Guidance

Breman said the path back to 2% inflation has been uneven. Even so, inflation is expected to return to the 1% to 3% target band in Q1. The RBNZ aims to keep inflation near the 2% mid-point over the medium term. The US Dollar found support after hawkish Federal Reserve minutes and stronger US data. Initial jobless claims fell to 206K for the week ending February 14, compared with 225K expected and a prior reading revised to 229K. Later on Friday, markets will follow preliminary Q4 US GDP and Personal Consumption Expenditures (PCE) data. If the numbers are weaker than expected, the US Dollar could soften and NZD/USD losses may be limited. With the RBNZ sounding more dovish and the Federal Reserve staying more hawkish, monetary policy is diverging. This gap suggests NZD/USD is more likely to drift lower in the coming weeks. We think positioning for further Kiwi weakness is the most sensible approach.

Key Risks And Levels

This view is supported by recent US data. The January 2026 core PCE price index rose 2.9%, showing inflation remains sticky and well above the Fed’s target. That contrasts with the RBNZ’s view that New Zealand inflation is already moving back into its 1% to 3% target band. The strong US labour market through late 2025 also gives the Fed room to keep rates higher for longer. The Kiwi is also facing added headwinds. Global Dairy Trade auction prices recently fell 1.5%, reducing a key source of export income for New Zealand. China’s growth has been soft as well, with manufacturing PMI just above 50, suggesting demand for New Zealand goods is not picking up. Together, these factors weaken support for the currency. For traders, buying NZD/USD put options expiring in March and April 2026 looks attractive. This strategy can benefit from a move lower, while limiting risk to the premium paid. With policy divergence increasing, the trade case remains strong. We are watching 0.5950 as an important support level. A clear break could open the door to a retest of the Q3 2025 lows near 0.5800. Those prior lows may draw interest again as price approaches them. Even so, the upcoming US Q4 GDP release is a key risk. A much weaker result could quickly reduce US Dollar strength and trigger a sharp rebound in NZD/USD, challenging a bearish view. Surprise stimulus from China could also lift the New Zealand Dollar. Create your live VT Markets account and start trading now.

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Silver held its recent gains and traded in a tight range during Friday’s Asian session. It hovered around $78.25–$78.30, near a one-week high set on Thursday, after rising over the past two days. Price action remains above a one-week-old ascending trend-channel resistance that has now been broken. This level also lines up with the 100-hour Simple Moving Average (SMA), which is flat near $76.32. Momentum signals are mixed. The MACD line sits slightly below the Signal line near zero, and the histogram is mildly negative. The RSI is 55 and edging higher. If the MACD histogram turns positive, the move higher could gain strength. An RSI move above 60 would support the bullish case. A drop below 50 would point to weaker momentum. On pullbacks, the former descending channel level at $75.58 may act as first support. Below that, additional support is near the channel floor around $70.31. The analysis notes that the technical section was produced with help from an AI tool. Silver is now consolidating below the mid-$78.00s after a solid two-day rally. The breakout above the 100-hour moving average keeps the bullish setup in place. Still, the lack of quick follow-through suggests caution. This often points to a sideways phase before the next bigger move. Recent strength is also backed by improving fundamentals. Industrial demand is rising, and January 2026 manufacturing PMI data shows the strongest expansion in more than two years. In addition, the International Energy Agency forecast this month that solar panel installations will rise 12% in 2026. Solar manufacturing relies heavily on silver, which supports the case for higher prices in the weeks ahead. At the same time, silver is being held back by uncertainty ahead of next month’s Federal Reserve meeting. Futures markets are pricing in an 85% chance of another rate hike to address persistent wage inflation. Higher rates often lift the dollar and weigh on precious metals. This is likely limiting upside for now. In this mixed setup, buying call options with strike prices near $80.00 and expiries in April or May 2026 is one way to position for a possible rally. This approach caps downside risk at the premium paid and leaves room for strong gains if silver breaks higher on supportive news. A similar setup appeared in late 2025, before silver rose from $65 to $72. Because prices are stuck in a narrow range, implied volatility in silver options has dropped to its lowest level since Q3 2025. That makes strategies like a long straddle—buying both a call and a put at the same strike—cheaper than usual. This position can profit from a large move in either direction, which may happen after the market processes the Fed decision. For traders already long silver futures, buying protective put options with a strike below the $75.58 support level can be a sensible hedge. The market reversed quickly in mid-2024 after unexpected inflation data, and puts can provide similar insurance against a sharp downturn. A confirmed break below $75.58 would suggest the bullish momentum has faded.

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WTI slipped to around $66.40 a barrel in Asian trading on Friday, after rising for two straight sessions. It eased from an earlier six-month high of $66.82. The pullback came as the market weighed possible supply risks tied to the US and Iran. President Donald Trump warned Iran to reach an agreement or face military action. Iran told the UN Secretary-General it does not seek conflict, but will respond to any attack.

Rising Tensions And Supply Risk

Reports said US officials were considering a possible military operation in the Middle East, while Israel continued to call for regime change in Tehran. The UN nuclear watchdog said the window for diplomacy is closing, as the US builds up its military presence. Any escalation could disrupt shipping through the Strait of Hormuz, which carries about 20% of global oil shipments. Estimates put the current risk premium in crude at roughly $7–$10 per barrel. US supply data also influenced prices. EIA figures showed crude stocks fell by 9.014M barrels last week, versus forecasts for a 2.1M-barrel build, after the prior week’s 8.53M increase. Last year, oil prices surged on sharp US-Iran tensions and an unexpectedly large drop in US crude inventories. At the time, a geopolitical risk premium of about $7–$10 per barrel helped keep prices above $65. That premium later faded as diplomatic progress steadied relations in late 2025.

Market Setup Heading Into March 2026

Conditions look very different heading into March 2026. This week’s EIA report showed an unexpected inventory build of 3.5 million barrels. That’s a clear contrast to the roughly 9 million barrel draw seen in a similar report last year. The shift suggests supply is now running ahead of demand. That view is also reflected in WTI struggling to hold $78, after a recent OPEC+ meeting failed to deliver deeper production cuts. With the market moving from supply fears to demand worries, near-term upside looks limited. We believe traders should consider the chance of flat or lower prices in the weeks ahead. Strategies such as buying puts or using bear call spreads on WTI futures may offer attractive risk-reward in this setup. Adding to the cautious tone, the International Energy Agency cut its 2026 global demand growth forecast by 200,000 barrels per day, citing weak economic data from Europe. In the past, when a major geopolitical risk fades, implied volatility often declines. Because of that, selling options premium may also be attractive if prices start to settle into a new, lower range. Create your live VT Markets account and start trading now.

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EUR/USD traded near 1.1770 in early Asian trading on Friday and stayed above 1.1750. Gains in the Euro were limited as traders focused on possible changes in European Central Bank leadership. The Financial Times reported that ECB President Christine Lagarde may leave before the end of her eight-year term. Analysts said an early exit could let Emmanuel Macron and Friedrich Merz influence the choice of her successor ahead of the April 2027 French presidential election.

Dollar Gains On Fed Hike Risk

The US Dollar held firm after strong US labour market data and hawkish Federal Open Market Committee minutes. The minutes said some Federal Reserve officials see rate hikes as possible if inflation stays above the 2% target. They also supported a “two-sided” approach to future policy. Markets were set to watch US flash GDP for Q4 and the Personal Consumption Expenditures (PCE) report later on Friday. In Europe, preliminary Purchasing Managers’ Index (PMI) readings for the Eurozone and Germany were also due. In late 2025, EUR/USD was stuck near 1.1770 because central bank outlooks were moving in opposite directions. The Federal Reserve signaled it could hike rates again, while the ECB faced leadership uncertainty. This kept the market in a fragile balance. That balance broke when Q4 2025 US GDP and PCE data came in stronger than expected, backing the Fed’s hawkish stance. The US economy grew at an annualized 2.9% in that quarter, keeping inflation pressure alive. The dollar then strengthened, and EUR/USD fell below 1.1600 in January 2026.

Options Market Prices In Breakout

Speculation about Lagarde’s future has lifted implied volatility in EUR/USD options. The one-month volatility index was near 6.5% in late 2025, but is now closer to 8.2% this week. This suggests options strategies like straddles could help traders position for a breakout without choosing a direction. Attention is now on the upcoming US January Core PCE data. Many analysts expect a 0.4% month-over-month rise. Another strong inflation reading would support the hawkish 2025 Fed minutes and could push the pair lower again. In that case, a move toward the 1.1450 support level becomes more likely. At the same time, Eurozone PMI data has improved slightly. The February 2026 flash composite reading came in at 50.6, just above the neutral 50 level for the first time in six months. This small uptick offers some support for the Euro. If upcoming US data is weaker than expected, EUR/USD could reverse sharply. Recent CFTC data shows speculative net short positions against the Euro are up about 15% since the start of 2026. With more traders positioned for a drop, the risk of a short squeeze is higher if US data disappoints. Because of this, holding long call options may be a useful hedge against a sudden move higher. Create your live VT Markets account and start trading now.

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Japan’s National CPI rose 1.5% year on year in January, down from 2.1%, according to the Japan Statistics Bureau. National CPI excluding fresh food rose 2.0% year on year, down from 2.4% and in line with market expectations. CPI excluding fresh food and energy rose 2.6% year on year in January, compared with 2.9% previously. After the release, USD/JPY was up 0.16% at 155.05.

Inflation And Core Measures

Inflation shows how prices rise for a basket of goods and services. It is often reported as month-on-month (MoM) and year-on-year (YoY) changes. Core inflation removes more volatile items, such as food and fuel, and is often used for policy targets around 2%. The Consumer Price Index (CPI) measures how prices change over time for a basket of goods and services. It is also reported on MoM and YoY bases. Core CPI excludes volatile food and fuel items, and higher core readings are often linked to higher interest rates. In foreign exchange, central banks may raise interest rates to fight higher inflation, which can support a currency. For gold, higher interest rates can reduce demand because they increase the cost of holding a non-yielding asset. Lower inflation can have the opposite effect. Japan’s latest inflation data shows a clear cooling trend, with the core rate falling back to the 2.0% target in January. This slowdown reduces the pressure on the Bank of Japan to raise interest rates again in the near term. As a result, the large interest-rate gap between the United States and Japan is likely to remain, supporting a stronger dollar against the yen. This view is supported by recent US data. Early February non-farm payrolls surprised to the upside, with 210,000 jobs added. This strength suggests the Federal Reserve is unlikely to rush into interest-rate cuts. This policy gap remains the main reason USD/JPY is holding near the 155 level.

Options Strategy For Usd Jpy

For derivatives traders, this backdrop makes USD/JPY call options attractive over the next few weeks. We are looking at strikes around 157 or 158, with expirations in late March or April, to benefit from any further yen weakness. This strategy offers defined risk if the current trend continues. Looking back at 2025, the Bank of Japan’s cautious stance after its historic policy shift stopped the yen from sustaining a rally. Today, implied volatility for USD/JPY options is near 7.5%, well below the double-digit levels seen for much of last year. Lower volatility makes option premiums cheaper, which may create a good entry point for new positions. Create your live VT Markets account and start trading now.

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