Money markets are pricing a 99% chance that the Reserve Bank of New Zealand (RBNZ) will keep the Official Cash Rate (OCR) at 2.25% on Wednesday, according to Prime Market Terminal. The decision comes after mixed domestic data. In Q3, GDP rose above the bank’s forecast. In Q4, CPI moved above 3% and came in at 3.1%.

Market Pricing And Recent Data

On 15 December, the bank said it expects the OCR to stay at 2.25% for an extended period if conditions evolve as expected. A Reuters poll found that 31 economists expect the OCR to remain at 2.25% at the 18 February meeting. Markets are also pricing in 37.6 basis points of rate rises by year-end, according to the Capital Edge tool. The story was corrected on 16 February at 21:06 GMT to fix the spelling of incoming Governor Anna Breman. The RBNZ targets price stability and maximum sustainable employment. Inflation is measured by CPI, with a target range of 1% to 3%. The Monetary Policy Committee sets the OCR. When inflation is above target, the bank may raise the OCR to reduce borrowing and cool demand. In extreme cases, it can use quantitative easing—creating money to buy assets—as it did during the Covid-19 pandemic. With the RBNZ’s decision due tomorrow, the market has almost fully priced in a hold at 2.25%. That means the decision itself matters less than the bank’s guidance. The focus will be on the statement’s tone and any changes in wording. The main tension is between the RBNZ’s official dovish stance and stronger economic data. In late 2025, Q4 inflation surprised to the upside at 3.1%, above the target band. That points to price pressures the central bank may not be able to ignore for long.

Potential Reaction In Nz Markets

Inflation is also being supported by a very tight job market. Data released two weeks ago showed the Q4 2025 unemployment rate fell to 3.3%, near multi-decade lows. A labor market this strong can lift wages and spending, which makes inflation harder to bring down. Even though the RBNZ said in December 2025 that it expected to hold rates for an “extended period,” interest rate markets appear unconvinced. Swap markets are now pricing in more than one full 0.25% hike by the end of this year. That highlights a clear gap between the market view and the bank’s last guidance. As a result, the main opportunity for derivative traders may be the risk of a more hawkish shift in the RBNZ’s language tomorrow, rather than the rate decision itself. Any sign the bank is more worried about persistent inflation could lift the New Zealand dollar sharply. Options could also be used to position for a jump in volatility around the announcement. The RBNZ was one of the first central banks to begin aggressive rate hikes in 2021 when inflation pressures looked similar. That history shows it can pivot quickly away from a patient stance. If the bank even hints that the “extended period” could be shorter than previously suggested, markets may react fast. Create your live VT Markets account and start trading now.

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The Malaysian ringgit is Asia’s best-performing currency this year. It is up 4.0% against the US dollar. Key supports are strong growth, foreign direct investment into data centres and technology supply chains, and steady exports. Malaysia’s Q4 GDP was revised up to 6.3% year on year. That suggested 5.2% growth in 2025, the fastest pace in three years. Exports were expected to stay firm, led by electronics, oil and gas, and crude palm oil. Inflation remains contained. Bank Negara Malaysia is expected to keep the Overnight Policy Rate unchanged at 2.75% for the foreseeable future. USD/MYR is expected to trade around 3.85–3.90 in the near term. From our perspective in late 2025, the ringgit looked set for solid gains. The case was based on strong growth forecasts and a steady central bank. We expected USD/MYR to stay in a tight 3.85–3.90 range, reflecting Malaysia’s healthy economy. But that did not happen. Today, the currency is trading near 4.78 per US dollar. Since then, the data has been more mixed than last year’s optimism. The final Q4 2025 GDP figure was 3.0% year on year, well below the earlier revised estimate of 6.3%. One bright spot is exports. January export growth rose 8.7%, helped by strong demand for electronics and petroleum products. Bank Negara Malaysia has kept the Overnight Policy Rate steady, as expected. It is holding policy to support the economy while inflation stays low. January inflation was 1.5%, showing limited price pressure and giving the central bank room to stay flexible. Even so, this policy stability has not translated into ringgit strength. Because of this gap between expectations and outcomes, derivative traders may want to focus on strategies that work in a range, or that allow for a slow MYR weakening, instead of betting on outright strength. One approach is to sell out-of-the-money USD call options with strikes above 4.85 to collect premium. This fits the view that a sharp ringgit rebound is unlikely. At the same time, strong exports could help limit the risk of an even larger currency slide.

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Silver slipped almost 1% in Monday’s North American session after touching $78.20. With US markets closed, thin trading and broad US Dollar strength pushed prices below the 50-day SMA at $79.45. A bearish engulfing candle earlier drove silver down from around $83.70 toward $75.00. Over the last two sessions, XAG/USD has stayed in a $75.00–$80.00 range.

Momentum Remains Bearish

The RSI is below the neutral line, which suggests sellers are still in control. Even so, price has not clearly broken below $75.00. A drop under $75.00 could open the way to $70.00, then the February 6 swing low at $64.10. On the upside, a break above $80.00 would shift attention to the February 12 high at $84.94 and the February 11 peak at $86.30, with the 20-day SMA at $89.99 after that. Silver is a precious metal. Traders can hold it physically or gain exposure through products like ETFs. Prices are shaped by the US Dollar, interest rates, demand, mining supply, recycling, and overall risk sentiment. Because silver is used in electronics and solar panels, industrial demand ties its price to economic activity in the US, China, and India. Silver often moves with gold, and traders use the gold/silver ratio as a valuation tool.

Market Context And Trade Setup

Silver is showing a familiar pattern, similar to last year’s price action. A strong US Dollar—after pushing the Dollar Index (DXY) toward 104.5 this month—continues to weigh on the metal. This setup looks like what we saw in 2025, when a bearish engulfing candle kept silver trapped in a tight range. The main level to watch is still $75.00. Sellers could not break this support cleanly last year. With the RSI again pointing to weak momentum, derivatives traders may consider put options if price closes clearly below this level. A break could quickly bring a retest of lower targets seen in 2025, such as $70.00. The pressure is not only technical. Fundamentals also matter. The January 2026 Consumer Price Index came in hotter than expected at 3.3%. That has pushed back expectations for rate cuts. Higher-for-longer rates tend to support the dollar, which can reduce demand for non-yielding assets like silver. If buyers can push price back above the $80.00 resistance, bearish trades should be reviewed. A sustained move above $80.00 could signal a shift in sentiment. In that case, call options or bull call spreads may make sense. Upside targets would include the February 2025 highs near $84.94. Industrial demand also looks weak. The latest global manufacturing PMI readings for January 2026 are just below the 50 level that separates contraction from expansion. Still, the gold/silver ratio has widened to above 92:1, which has often suggested silver is cheap versus gold. This may offer a longer-term opportunity for pairs traders who expect the ratio to move back toward its historical average. Create your live VT Markets account and start trading now.

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Major currency pairs were mostly flat on Monday because US stock and bond markets were closed for Presidents’ Day. This week’s key events include UK jobs and inflation data, plus the US PCE price index. Iranian Foreign Minister Abbas Araghchi arrived in Geneva for a second round of US–Iran nuclear talks. The goal is to reduce tensions and avoid a new military clash, after Ayatollah Ali Khamenei warned a wider regional conflict could be possible.

Major Pairs Snapshot

The US Dollar Index held near 97.10. EUR/USD traded around 1.1850, USD/JPY near 153.50, AUD/USD near 0.7070, GBP/USD near 1.3630, and USD/CAD near 1.3630. Gold traded near $4,991 and edged lower ahead of major data. Markets are also watching the FOMC Minutes later this week and Canada’s January CPI on Tuesday. Tuesday brings the RBA minutes, Germany’s January Harmonised CPI, UK claimant count change, UK employment change, the UK ILO unemployment rate, and Canada’s January CPI. Wednesday includes the RBNZ rate decision, UK January CPI, and the FOMC Minutes. Thursday features Australia’s January employment change and unemployment rate. Friday includes UK January retail sales, Germany flash HCOB composite PMIs, Eurozone PMIs, UK flash S&P Global PMIs, US December Core PCE, and February US S&P Global PMIs.

Gold Demand And Central Bank Role

Central banks bought 1,136 tonnes of gold worth about $70 billion in 2022, the highest yearly total on record. Gold often moves in the opposite direction to the US Dollar and US Treasuries, and it is priced in dollars (XAU/USD). The market backdrop on February 17, 2026 is very different from this time last year. In February 2025, markets were quiet ahead of key inflation releases. We see a similar setup now as traders wait for this month’s PCE data. The biggest difference is where major assets started after a year of large moves. Last year, the US Dollar Index was near 97.10. Now it is much higher, around 104.50. This rise reflects the Federal Reserve’s stance on keeping rates higher to control inflation. January 2026 inflation has eased to 2.4%, but it is still above the 2% target. The dollar has been the winning trade for much of the year, but the main question now is when the Fed might pivot. A stronger dollar has weighed on other major currencies. EUR/USD is now near 1.07, down sharply from about 1.1850 in February 2025. The split between the Fed and the European Central Bank matters here, especially as the ECB has hinted at possible rate cuts. As the next policy meetings approach, EUR/USD options may be useful for managing expected swings. Geopolitics also shaped last year’s market tone. The Iran nuclear talks added a steady layer of risk. Those talks later stalled, but tensions in other regions have continued. That keeps headline risk high and makes risk controls essential. The yen has been another key story. USD/JPY was around 153.50 in February 2025. Today it is closer to 150.00. This shift reflects the Bank of Japan’s slow move away from ultra-loose policy in late 2025. Because of that, betting against the yen is no longer as straightforward as it was a year ago. GBP/USD shows a similar adjustment. The pair has fallen from about 1.3630 to around 1.25. Political stability under PM Keir Starmer in early 2025 did not offset the drag from stubborn inflation. The latest January 2026 data puts UK CPI at 3.8%, which remains a major challenge for the pound. Gold shows the biggest reversal. In February 2025 it traded near an extreme $4,991 per ounce. Today it is closer to $2,350. That suggests last year’s heavy safe-haven demand has faded. In this environment, strategies built for lower volatility, such as short strangles, may fit better than in 2025. Central bank buying is still supporting gold, but at a slower pace than the record levels of 2022. World Gold Council data for 2025 shows central banks added about 800 tonnes. That is still strong, but it was not enough to keep prices near last year’s highs. The trend suggests a firmer floor for gold, but a lower ceiling than before. This week, the focus is on Canada’s inflation report and the US Federal Reserve minutes, similar to the setup in 2025. The main release, however, is Friday’s US Core PCE. It is the clearest guide to the Fed’s next step and is likely to set the tone for markets in the weeks ahead. Create your live VT Markets account and start trading now.

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USD/SGD is trading in a narrow, quiet range near recent lows. Softer US CPI and labour data have kept expectations of Federal Reserve rate cuts in place, which is weighing on the US Dollar. A stronger JPY and RMB, along with expectations of Monetary Authority of Singapore tightening, are keeping the S$NEER near the strong side of its band. This suggests any further USD/SGD declines may be gradual unless the US Dollar weakens broadly again.

Range Bound Trading Outlook

The pair is expected to trade both ways unless a new catalyst appears. Support is seen at 1.2590, the January low. Resistance is seen at 1.2670 and 1.2710. The 1.2710 level is also the 21-day moving average. The article says it was produced with help from an AI tool and reviewed by an editor. It is attributed to the FXStreet Insights Team, which compiles market observations and analyst notes. USD/SGD continues to trade in a very tight range near its recent lows. January 2026 US inflation came in at 2.8%, and non-farm payrolls were a modest 155,000. These data points have reinforced expectations of a Fed rate cut. This fits the trend seen through much of 2025, when US data began to soften.

Options Strategy Considerations

The Singapore dollar remains firm, with the S$NEER near the top of its policy band. Singapore’s core inflation held steady at 3.1% in the latest reading. This supports the view that the MAS will keep its policy of gradual currency appreciation. As a result, there appears to be limited room for SGD to weaken. This backdrop suggests implied volatility in USD/SGD options may be expensive relative to the likely price movement. Selling volatility using strategies such as short strangles or iron condors could work in the coming weeks. These strategies benefit if the pair stays between the key levels, roughly 1.2590 and 1.2710. For traders with a directional view, the downside still looks limited. With strong support near 1.2590, selling out-of-the-money put spreads may be a sensible approach. This collects premium and can profit if USD/SGD stays above a chosen level, trades sideways, or rises slightly. The main risk is a major data surprise from the US or Singapore. A much hotter US inflation print, or an unexpected dovish signal from the MAS, could break the range. Any positions should be managed with close attention to upcoming economic releases. Create your live VT Markets account and start trading now.

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Gold fell almost 1% in quiet Monday trading. US markets were closed for Presidents’ Day, and China was shut for the New Year. XAU/USD traded near $4,992 after hitting a daily high of $5,054, dropping below $5,000. The US Dollar Index rose 0.22% to above 97.00, which pressured gold. Even so, markets still price in about 60 basis points of Federal Reserve rate cuts by year-end. That view remains in place despite last week’s strong US Nonfarm Payrolls report and softer inflation data.

Fed Signals And Yield Moves

US Treasury yields fell on Friday. The 10-year yield dropped five basis points to 4.05% after touching 4.125%. Chicago Fed President Austan Goolsbee said services inflation is still high, and he wants to see more progress on inflation before rates are cut. Money markets expect the Fed to keep rates unchanged at the March 18 meeting, according to Prime Market Terminal data. This week’s US calendar includes Durable Goods Orders, housing data, Fed speakers, the FOMC Minutes, Initial Jobless Claims, the second estimate of Q4 2025 GDP, and core PCE inflation. On geopolitics, Russia–Ukraine talks are scheduled in Geneva on February 17. Iran has also held naval drills in the Strait of Hormuz ahead of planned talks with Washington. From a technical view, gold has posted three straight sessions of lower highs since the February 11 peak of $5,119. Resistance sits near $5,100. Support levels include the 20-day EMA, then $4,900, then $4,800. The 50-day EMA is at $4,634. Resistance levels to watch are $5,050 and $5,119.

Immediate Technical Bias

Gold has clearly broken below the $5,000 psychological level, which is bearish in the near term. A stronger US dollar is driving the move, and holiday-thin liquidity may be amplifying the price swings. For the next few days, traders may treat $5,000 as a new resistance level. The main tension is whether markets should still expect 60 basis points of rate cuts while the Fed stays cautious and the data remains firm. Last month’s Core PCE came in at 3.1% year-over-year, showing inflation is still sticky and supporting the Fed’s careful approach. If markets reduce their rate-cut expectations, gold could face downside pressure. A similar pattern played out in 2023. Markets repeatedly priced in a Fed pivot that did not happen. The Fed kept rates higher for longer, which supported the dollar and weighed on gold. That history is a reminder not to assume rate cuts are close. Volatility is likely to rise this week with the FOMC Minutes and Core PCE on the calendar. Geopolitical risk is also increasing, with Iran’s naval drills and Russia-related talks. Implied volatility in crude oil futures has already jumped 15% over the past week. This backdrop can suit options strategies that benefit from larger price swings, such as long straddles. For traders with a bearish view, buying put options with strikes near the next support at $4,900 could be a defined-risk way to benefit if higher inflation forces markets to reconsider dovish Fed expectations. A break below $4,900 could open a fast move toward $4,800. At the same time, risk in the Strait of Hormuz matters. Any escalation could trigger a flight to safety. A lower-cost hedge could be far out-of-the-money call options, for example with a $5,150 strike. This can help protect against a sudden geopolitical shock without taking a large bullish position. Overall, the dollar remains the key driver. The DXY reached as high as 114 in 2022, and at just above 97 today, it still has room to rise if the Fed stays firm. Further dollar strength is the biggest headwind for gold in the coming weeks. Create your live VT Markets account and start trading now.

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BNY expects Bangko Sentral ng Pilipinas to cut its policy rate by 25 basis points to 4.25% on 19 February, continuing its easing cycle. It says the main reason is rising risks to economic growth. Inflation is seen as manageable within the medium-term target, and it is not expected to drop quickly. BNY highlights greater downside risks to growth than near-term upside risks to inflation.

Growth Risks Driving Monetary Easing

The bank sees a chance of at least one more rate cut in Q2 2026. It links this view to domestic political uncertainty and limited clarity on when growth will recover. It also notes that the Philippine peso has a cyclical balance-of-payments profile. This increases the need for rate support and for a strong real-rate buffer to help stabilise emerging-market currencies. With the central bank expected to cut its key rate by 25 basis points to 4.25% this Thursday, the message is clear. Policymakers are prioritising growth support over inflation concerns. For derivative traders, this points to a weaker Philippine peso against the US dollar. Recent data supports that view. January inflation came in at 3.1%, well within the central bank’s target range. Meanwhile, GDP growth in Q4 2025 was a disappointing 5.2%, signalling a slowdown that supports monetary easing. Through much of 2025, the peso also struggled as the trade deficit widened, making it sensitive to any loss of yield advantage.

Derivative Positioning For Peso Weakness

In this setting, buying US dollar calls against the peso may be an attractive strategy. These options give the right to buy dollars at a set price, which can profit if the peso weakens after the rate decision. Traders could also consider selling peso forward contracts to lock in an exchange rate for the coming months. Looking beyond this week, the prospect of at least one more cut in the second quarter suggests the peso could stay under pressure. Further easing can also keep volatility elevated, which may suit longer-dated options that expire after Q2. Keeping a solid interest-rate gap is important for the peso, and continued rate cuts reduce that support. Create your live VT Markets account and start trading now.

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Colombia’s Council of State has suspended the government’s 23% minimum-wage increase announced in December. This pause stops the record increase from taking effect for now. The ruling orders the Petro administration to issue a new decree within eight days. That decree must include an economic justification that matches BanRep’s inflation target, productivity trends, and other legal requirements.

Market Reaction And Immediate Impact

After the suspension, inflation expectations fell and short-term yields moved lower. The Colombian Peso (COP) strengthened. However, the decision also raised policy and political uncertainty. What happens next depends on the content and timing of the replacement decree. Looking back at the Council of State’s decision in late 2025, the ruling gave a meaningful—but temporary—boost to the peso and government bonds. It blocked a major inflationary shock and pushed the administration to propose a more economically grounded policy. That early relief has since faced a more complicated reality. January’s inflation data, released last week, stayed high at 7.8%. It was slightly above market expectations and well above the central bank’s target. This suggests that even the later, more moderate 12% wage increase is still adding to price pressures.

Rates Outlook And Positioning

BanRep kept its benchmark rate at 12.50% at its last meeting. In response, the interest rate swap market is no longer pricing the aggressive rate cuts we expected in Q2 2026. Traders now appear to expect rates to stay higher for longer to deal with persistent inflation. The yield curve has flattened as these expectations have shifted. The peso strengthened to around 3,950 per dollar after the December 2025 court decision, but it has since given back part of that move and now trades near 4,050. Meanwhile, recent political messaging from the administration—especially around other major reforms—has pushed implied volatility on USD/COP options higher. We see value in buying short-term USD/COP call options as a hedge against a sudden risk-off move driven by policy uncertainty. This setup is similar to the volatility seen in 2023, when surprise policy announcements caused sharp currency sell-offs. At that time, implied volatility often lagged the actual moves, creating opportunities for traders who were positioned early. History suggests current options pricing may still underestimate the risk of a political-risk spike in the coming weeks. Create your live VT Markets account and start trading now.

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The Australian dollar was mostly unchanged against the US dollar on Monday. AUD/USD traded near 0.7072 after falling back from a three-year high around 0.7147. Trading was calmer, with US markets closed for Presidents’ Day and some Asian markets shut for the Lunar New Year. The US dollar held steady as investors reassessed when the Federal Reserve may start cutting rates, after new US data. Headline CPI rose 0.2% month on month in January, down from 0.3% in December. Annual inflation also slowed to 2.4% from 2.7%.

Us Data And Fed Timing

US Nonfarm Payrolls rose by 130K in January, up from December’s revised gain of 48K and above expectations. The unemployment rate ticked down to 4.3% from 4.4%. Interest-rate futures now price in more than 50 basis points of cuts through the rest of 2026. The CME FedWatch Tool shows markets expecting the first cut in June. This week brings the Fed’s Meeting Minutes on Wednesday, followed by core PCE inflation and the advance Q4 GDP reading on Friday. In Australia, RBA minutes are due Tuesday, after a 25 basis point rate rise to 3.85% from 3.60% at the start of 2026. Australia’s employment report on Thursday is also a key focus. Markets are pricing a possible rate rise as early as May. With the US dollar strengthening again, we see AUD/USD pulling back from its high near 0.7147 as an important shift. Last month’s US jobs report showed 130,000 new jobs, and the unemployment rate fell to 4.3%. This gives the Fed room to wait. It also reduces expectations for near-term rate cuts and helps support the US dollar.

Rba Fed Policy Divergence

Policy differences between the two central banks are becoming the key driver for this pair. We still see the Fed moving toward rate cuts over time, with US inflation now at 2.4%. However, the Reserve Bank of Australia is moving the other way. The RBA’s recent hike to 3.85% aimed to address ongoing price pressure, especially after Australia’s Q4 2025 inflation report showed annual inflation holding at 4.1%. This policy split suggests volatility could rise, especially with major data releases this week. One way to trade bigger price swings is through options, such as buying AUD/USD put options to position for more downside. Options can limit risk while still allowing traders to benefit if the pair falls on strong US data or a more hawkish Fed message. Looking ahead, Thursday’s Australian jobs report is likely to be a major catalyst. Another strong result could increase expectations of a May RBA hike. But any signs of weakness would likely speed up a decline in AUD/USD. Given the current trend, we prefer positions that benefit from a stronger US dollar, with a break below the 0.7000 psychological level as a key target. Create your live VT Markets account and start trading now.

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China’s Q4 2025 balance of payments data shows a current account surplus of USD 242 billion, or 4.9% of GDP. This was a record for the quarter. Foreign direct investment into China rose to USD 38.8 billion in Q4 2025. This was the highest level since early 2022.

Indicators Of Tight Yuan Management

Only preliminary data has been released, and portfolio investment figures are still pending. Still, China’s stock market gains in Q4 2025 suggest there were no major foreign capital outflows during the quarter. The report also points to expected official purchases of foreign bonds and currency-market activity through the banking sector. The article says it was produced using an AI tool and reviewed by an editor. The latest data on China’s very large Q4 2025 current account surplus also suggests the Yuan is still tightly managed. Despite the record USD 242 billion surplus, the currency did not rise sharply. This implies authorities are actively managing capital flows. As a result, large and sudden moves in the Yuan look less likely in the near term. For derivative traders, this supports the case for continued low volatility in USD/CNH. Data from early February 2026 shows one-month implied volatility for USD/CNH options near 4.5%, which is low compared with other major currency pairs. The People’s Bank of China also continues to set the daily reference rate within a narrow range, which helps keep the market stable. January 2026 trade data showed another strong surplus of USD 78 billion, which suggests the same trend is continuing into this year. China’s foreign exchange reserves also rose slightly to USD 3.26 trillion. This is a sign officials may be absorbing foreign currency inflows to limit Yuan appreciation, reinforcing the view that the central bank is leaning against market pressure.

Implications For Usd Cnh Volatility

This environment looks very different from the sharp volatility spikes seen in 2015. Policy now appears more deliberate and controlled. Because of this, strategies that tend to benefit from low volatility and range-bound trading—such as selling strangles on USD/CNH—may be worth considering. The assumption is that the central bank will keep pushing back against any major breakout moves in the coming weeks. The sharp rise in foreign direct investment, now the highest since early 2022, is another inflow that authorities must manage. One possibility is that state-linked banks are recycling these inflows by buying foreign bonds, including U.S. Treasuries. That would reduce the pressure for the Yuan to strengthen and help keep the exchange rate stable. Create your live VT Markets account and start trading now.

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