BNY’s EMEA Macro Strategist Geoff Yu expects the Reserve Bank of New Zealand to keep the policy rate at 2.25% on 18 February. However, he notes that markets are increasingly pricing in tighter policy, as inflation remains stubborn. BNY says that confirmation of a policy shift could support higher NZD valuations. It adds that the currency is relatively underheld, which may affect positioning in NZD crosses.

Rbnz Policy Shift And Nzd Outlook

The bank also says the RBNZ can use strength in currency crosses to help limit rises in tradables inflation. It expects the NZD’s path to remain volatile, given New Zealand’s policy cycle. The article says it was produced using an artificial intelligence tool and reviewed by an editor. It also says the FXStreet Insights Team selects market observations from external experts and adds internal and external analysis. With the Reserve Bank of New Zealand meeting this Wednesday, the cash rate is expected to stay at 2.25%. The main focus is the bank’s tone, because markets are starting to expect rate hikes. Persistent inflation is pushing the RBNZ to consider tightening policy sooner. Inflation in the final quarter of 2025 came in at 4.5%, well above the bank’s 1–3% target range. The labour market is also tight, with unemployment falling to 3.8% in the same period. This increases pressure on the RBNZ to signal a tougher stance. A hawkish message on Wednesday looks likely, even if the rate does not change.

Trading And Positioning Implications

For derivatives traders, this suggests positioning for a stronger New Zealand dollar over the next few weeks. With policy uncertainty still high, buying NZD call options is a straightforward way to target a potential rise while limiting risk. Clear confirmation of a shift from the RBNZ could give the currency a meaningful lift. The NZD also appears to be underowned, which suggests investors have room to add long positions. That makes cross trades—such as buying NZD against the Australian dollar—more attractive. The RBNZ can also use a stronger exchange rate to reduce inflation coming from imported goods. The RBNZ paused its hiking cycle through most of 2025, expecting global disinflation to ease domestic price pressures. That approach now looks less effective. A clear change in wording this week would confirm a more assertive policy direction. That is the shift traders may want to position for. Create your live VT Markets account and start trading now.

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Russia’s central bank cut its key rate by 50 basis points. It also raised its end-2026 inflation forecast by 0.5 percentage points because of a VAT increase. The bank also said it expects to keep cutting rates at future meetings. The forecast for the average key rate in 2027 was raised to 8.0–9.0%, from 7.5–8.5%. This is still below today’s rate, so more cuts are still expected.

Key Rate Cut Signals Easing Bias

The bank lowered its 2026 oil export price assumption to $45 per barrel, down $10 from the October projection. It also cut its projected current account surplus for 2026 to $10bn, from $27bn. The bank said monetary policy could matter more for the rouble if trade flows weaken, especially energy exports. It kept its view that USD/RUB could move back towards 100.0 over the coming quarters. The article says it was produced with help from an AI tool and reviewed by an editor. Russia’s central bank has cut its key interest rate by 50 basis points to 15.5%, even though January inflation was still high at 7.1% year over year. This signals a clear push toward easier policy, which often puts pressure on a currency. We see this as the start of a longer easing cycle.

Trading Implications For Usd Rub

The bank’s own forecasts support this view. It expects the average policy rate to fall to 8.0–9.0% by 2027. That points to more rate cuts over the next year. For FX traders, a wider rate gap versus the US dollar makes the rouble less attractive to hold. Pressure is also rising from the oil outlook. The official 2026 average oil price forecast was cut to $45 per barrel. With Brent near $58, the bank is effectively pricing in a sharp drop in a key revenue source. A weaker oil outlook would likely hurt government finances. As a result, the projected 2026 current account surplus is now only $10bn, much lower than recent levels. For context, the surplus was close to $15bn in Q4 2025 alone. Fewer foreign-currency inflows is a basic argument for a weaker rouble. With lower rates and a weaker trade picture, we expect USD/RUB to trend higher from around 92.50. Our target is still a move back toward 100.00 over the coming quarters. Derivative traders may want to position for rouble weakness. One approach is to buy USD/RUB call options with expiries three to six months out. This offers upside exposure while limiting the maximum loss to the option premium. Create your live VT Markets account and start trading now.

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EUR/JPY moved above 182.00 on Monday as the Euro strengthened against a weaker Japanese Yen. The move followed softer Japanese GDP data. Markets were also waiting for the Eurozone Industrial Production report due later in the day. Eurozone Industrial Production is expected to drop 1.5% in December, after a 0.7% rise in November. The annual rate is forecast to slow to 1.2% from 2.5% in November.

Key Data Driving The Move

Japan’s preliminary Q4 GDP showed 0.1% growth quarter-on-quarter, below the 0.4% forecast. On an annualised basis, it rose 0.2%, well under the 1.6% consensus estimate. In the previous quarter, Japan’s economy shrank 0.7% and fell 2.6% year-on-year. The latest figures have increased doubts that the Bank of Japan will raise rates in March. On Monday, Prime Minister Takaichi met Bank of Japan Governor Ueda. Ueda said the talks focused on general economic and financial conditions, and that there was no request related to interest rates. A year ago, in February 2025, EUR/JPY also climbed above 182.00. That move was driven by a weaker-than-expected Japanese Q4 GDP report, which raised questions about a possible Bank of Japan rate hike. At the same time, markets were looking ahead to Eurozone industrial production data that was also expected to be weak.

Market Conditions And Trade Approach

Today’s backdrop is different for the Yen. Japan’s latest national Core CPI for January 2026, released last week, came in at 2.6%. Inflation has stayed above the Bank of Japan’s target for several months. This steady inflation is strengthening the view that policy normalization is a question of when, not if, which provides underlying support for the JPY. The Eurozone outlook remains weak, unlike the mood in early 2025. The flash manufacturing PMI for February 2026 came in at 46.1, staying in contraction and pointing to continued industrial strain. This keeps the European Central Bank cautious and limits how far the Euro can rise against other currencies. With this policy gap widening, traders may want to prepare for a possible decline in EUR/JPY. One approach is to buy put options with strikes below the current price to benefit from potential Yen strength and Euro weakness. A bear put spread could also help reduce the upfront premium while targeting a moderate move lower over the next few weeks. Implied volatility in this pair is also rising, up nearly 15% since the start of the year. This suggests markets expect larger swings ahead of upcoming central bank meetings. As a result, putting trades on sooner may help avoid higher option premiums later. Create your live VT Markets account and start trading now.

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Silver traded near $77.00 on Monday, posting small losses and holding close to last week’s low around $74.50. Trading has been choppy for weeks, and the downtrend from the late-January highs is still in place. Precious metals did not get a boost from the weaker US Dollar, and trading stayed quiet. Volumes were low because many Asian markets were closed for Lunar New Year, and US markets were also shut for President’s Day.

Technical Picture On The Four Hour Chart

On the 4-hour chart, XAG/USD was at $77.09 and remained below the falling 50-period SMA, which is near $80.00. The MACD histogram stayed negative, while the RSI was 43. Support sits near $74.40. The next support level is the 6 February low near $64.00. Resistance is around $80.00, then near $86.30, with more resistance above $92.00 from the 4 February highs. Silver prices can move with the US Dollar, interest rates, safe-haven demand, mining supply, and recycling flows. Industrial demand from electronics and solar also matters. Economic conditions in the US, China, and India can affect prices as well, and silver often follows gold. At this time in 2025, silver showed a similar bearish pattern. It struggled to hold above $80.00 even while the US Dollar was weak. Now, on February 16, 2026, silver is capped again. It is trading in a tight range around $68.00 and still lacks upside momentum. This repeated failure to rally suggests sellers remain in control in the near term.

Macro And Positioning Signals

Recent economic data supports a cautious view. January 2026 inflation came in hotter than expected at 3.4%, which strengthens the Federal Reserve’s case for keeping interest rates high. That backdrop tends to weigh on non-yielding assets like silver. Investor demand also looks softer. Reports show silver ETF holdings have fallen by more than 5 million ounces since the start of the year, pointing to weaker appetite. For derivatives traders, this favors strategies aimed at range trading or further downside in the weeks ahead. One approach could be buying puts with a strike near $64.00, a key support area in early 2025, as protection against a breakdown. Elevated open interest in those contracts suggests other traders are positioning for a similar move. Silver has also lagged gold, and that gap has grown in early 2026. The Gold/Silver ratio has climbed above 92:1, its highest level in more than a year. This suggests traders are leaning toward gold’s safe-haven role over silver’s industrial demand as global manufacturing data slows. Historically, a rising ratio can come before more weakness in silver. Create your live VT Markets account and start trading now.

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Japan’s Q4 GDP was weaker than expected. That capped the Japanese Yen’s recent gains. USD/JPY rebounded above 153.00 after briefly dipping to around 152.27. The GDP miss was mainly due to inventories and lower public investment. The softer report lowered expectations for Bank of Japan (BoJ) rate hikes, although markets still expect more tightening over time.

Key Support Levels For Usd Jpy

On USD/JPY, support sits near 152.00. Another key support level is the 200-day moving average, around 150.60. The report says the content was created using an AI tool and reviewed by an editor. It also says the FXStreet Insights Team picks market views from experts and adds input from internal and external analysts. The Yen has weakened again this week, pushing USD/JPY above 158.50. This came after Japan’s Q4 2025 GDP report showed an unexpected 0.2% contraction, similar to the weakness seen around the same time last year. Soft growth makes it harder for the BoJ to justify major policy tightening. This looks like a repeat of early 2025. Back then, a GDP miss ended Yen strength and helped USD/JPY bounce from the 152.00–153.00 zone. As before, weaker momentum is weighing on BoJ hike expectations. Markets are now pricing a slower pace of rate increases.

Options Strategies For A Higher Usd Jpy

The Yen is also being pressured by a stronger US dollar. The dollar gained after a hotter-than-expected US inflation report for January 2026, which showed inflation at 3.2% year over year. With inflation staying sticky, more investors think the Federal Reserve will keep rates higher for longer. This widening gap between US and Japanese interest rates remains the main driver of USD/JPY strength. For derivatives traders, buying USD/JPY call options may fit this setup. It offers upside exposure while limiting losses if the BoJ suddenly acts to support the Yen. Consider strikes above 159.00 with expirations over the next few weeks. Another approach is to sell out-of-the-money USD/JPY put options to collect premium, based on the view that a sharp drop is unlikely. Major support now looks closer to 155.00. That level may act as the new floor, replacing the 152.00 support that was in focus in 2025. Create your live VT Markets account and start trading now.

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The Indian Rupee started the week weaker against the US Dollar, with USD/INR rising to around 90.70. The move followed Foreign Institutional Investors (FIIs) selling shares worth Rs. 7,395.41 crore on Friday, after IT stocks fell on concerns about AI disruption. The Rupee also came under pressure from expectations of higher oil prices tied to US-Iran tensions. India’s WPI inflation for January rose to 1.81% YoY, above estimates of 1.25% and December’s 0.83%.

Dollar Outlook And Rate Expectations

The US Dollar was steady, with the Dollar Index (DXY) trading near 96.95. Markets still expect the Fed to keep rates in the 3.50%-3.75% range, based on the CME FedWatch tool. US headline inflation eased to 2.4% YoY from 2.7% in December. Monthly CPI increased 0.2%, below estimates and the previous 0.3%. In India on Monday, USD/INR held near 90.70 and struggled to push above the 20-day EMA around 90.73. The 14-day RSI stayed in the 40.00-60.00 range. Key levels to watch are 90.00 on the downside and 91.25 if the pair breaks higher. The Rupee remains under notable pressure as foreign investors reduce exposure to IT stocks due to AI-related disruption fears. This looks similar to 2023, when FIIs pulled out more than $3.4 billion in a single month amid global uncertainty. For now, USD/INR is trading just below the key resistance near 90.73.

Trading Strategies And Key Levels

Rising oil prices linked to US-Iran tensions are adding to the weakness. This is a major issue for India, which relies heavily on oil imports. In the past, similar geopolitical flare-ups near the Strait of Hormuz pushed Brent crude up by more than 8% within weeks, and that pattern could repeat. Higher oil prices tend to make holding Rupees less appealing. At home, the surprise jump in wholesale inflation to 1.81% may make the Reserve Bank of India more cautious, which can weigh on sentiment. At the same time, the US Dollar remains supported because the Federal Reserve is reluctant to cut rates. This is similar to early 2024, when stubborn services inflation kept policy tight. Together, higher local inflation and a firm Dollar help keep USD/INR supported. Given this setup, traders may consider buying USD/INR call options with a strike around 91.00, looking for a break above the 90.73 technical level. This offers upside exposure if the Rupee weakens, while limiting risk to the premium paid. It may also be sensible to hedge Rupee receivables using forward contracts near the current 90.70 level. However, the RSI suggests momentum is not strong, so the pair may stay range-bound for now. If 90.73 holds as resistance, selling out-of-the-money call options with a strike near 91.25 could be a way to collect premium. This works best if the Rupee avoids a sharp decline and USD/INR stays below that level. Traders should also watch for signs that FII selling is slowing, since that could trigger a reversal. If USD/INR fails to break higher and instead falls, a move toward the psychological support at 90.00 becomes more likely. In that case, buying put options may be a way to position for a stronger Rupee. Create your live VT Markets account and start trading now.

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The UK has a busy data week. January jobs figures are due on Tuesday, and inflation data is due on Wednesday. The jobs report is expected to show a cooler labour market and slower annual wage growth. If these trends continue in the March data, a Bank of England rate cut next month looks more likely. Inflation is also expected to ease. Headline CPI is forecast to edge lower because of airfare moves, softer food prices, and a weaker impact from last year’s private school tax rise.

Uk Data And Rate Cut Expectations

Core services inflation is expected to change little. Political attention has faded, but betting markets put the chance of Prime Minister Keir Starmer stepping down by the end of June at about 70%. The pound is seen as at risk of falling at times if Starmer’s position weakens. EUR/GBP is linked to a target level of 0.88. The article says it was produced with help from an artificial intelligence tool and reviewed by an editor. It is credited to the FXStreet Insights Team. The next UK data releases are likely to confirm a weaker economic picture. Last week’s jobs report on February 11, 2026, showed unemployment edging up to 4.5%. It also showed annual wage growth slowing to 3.8%, the lowest since mid-2024. Alongside this, last Wednesday’s inflation data showed headline CPI falling to 2.9%. Together, these figures support the view that the economy is slowing.

Sterling Outlook And Eur Gbp Target

A cooler labour market and easing price pressures make a Bank of England rate cut in the coming months look more likely. A similar pattern played out in the second half of 2025, when weaker data steadily increased expectations for easier policy. Markets are now pricing in a meaningful chance of a rate cut by the end of next quarter, which could keep pressure on the pound. Politics is also weighing on sterling. In recent YouGov polls, Prime Minister Keir Starmer’s approval rating has fallen to net -25, as public sector disputes continue and growth stays weak. Any new signs of instability around his leadership could trigger more drops in the currency. Given our dovish view on the Bank of England and these political risks, we remain bullish on EUR/GBP. The pair has recently broken above 0.87, a level that acted as strong resistance through 2025. This suggests strategies positioned for a move towards our 0.88 target may still be attractive. Create your live VT Markets account and start trading now.

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Asia Pacific equities excluding Japan rose 32% in USD terms last year. That was their best annual result since 2017. This happened even with trade and geopolitical tensions, and higher policy uncertainty. The rise was helped by a weaker US dollar, tariff rates that were lower than feared, and a US–China trade truce. The report says recent gains are now being driven more by regional fundamentals.

Regional Fundamentals And Reform Momentum

The report highlights macro reforms and economies that have reduced risks as key supports. It also points to a positive outlook for GDP and corporate profits, resilient domestic demand, and progress on regional trade integration. It links the region to the tech and AI cycle. It notes strength in semiconductor manufacturing in Taiwan and South Korea. It also says Asian countries are among the top global contributors to the GitHub code repository. It adds that India and south-east Asian economies, including Singapore, Malaysia, and Vietnam, play roles across the AI supply chain, from assembly to data centres. It also says mainland China’s tech progress is tied to policy plans focused on AI, EVs, green energy, and advanced manufacturing. We are seeing strong fundamentals take centre stage in Asian markets. This builds on 2025, when Asia Pacific stocks ex-Japan gained 32%, their best performance in years. Derivative traders may want to position for more upside by considering call options on broad regional ETFs that capture this diversified growth.

Options Positioning For The Ai Tailwind

The AI supercycle remains a main catalyst, with Asia dominating key parts of the semiconductor market. Data from early February 2026 shows global semiconductor sales for January rose 22% year-over-year. Taiwanese and South Korean firms led this growth, supported by steady AI-related demand. This may support buying near-term call options on country-specific ETFs such as the iShares MSCI Taiwan ETF (EWT) for leveraged exposure to this tailwind. The AI theme is also spreading to other economies like India and Vietnam. These markets matter for assembly and data centre operations. Indian IT services firms have just completed an earnings season where Q4 2025 results mostly beat estimates, driven by new AI integration contracts. This helped the NIFTY 50 reach new highs last week. We believe bull call spreads on selected Indian technology stocks could be a cost-effective way to take part in this trend. Policy-driven growth is also important, especially in mainland China, where Beijing has repeated its focus on AI, EVs, and advanced manufacturing. Even with this positive backdrop, valuations across the region still look attractive. The MSCI AC Asia ex Japan Index trades at a forward price-to-earnings ratio of 14, well below the S&P 500’s 21. With this valuation buffer, selling cash-secured puts on selected high-quality names could be one way to generate income. Create your live VT Markets account and start trading now.

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EUR/GBP dropped below 0.8700 on Monday after failing near 0.8720. It then moved toward 0.8685, the low end of last week’s range. The wider downtrend channel still has resistance near 0.8720. The pair fell 0.3% on Friday, even after the Eurozone GDP second estimate was revised higher. Eurozone Industrial Production data due Monday is expected to show a 1.5% drop in December, after a 0.7% rise in November.

Key Drivers And Near Term Focus

The UK economic calendar is empty on Monday. Focus shifts to Tuesday’s UK jobs report, which could change expectations for the Bank of England’s next move. On the daily chart, EUR/GBP traded near 0.8695 after failing at trendline resistance. The bounce from early February lows is losing steam. MACD shows a smaller positive histogram, while RSI is slightly above 50. The pair has fallen for four days in a row and is holding just above support at 0.8675, the 6 February low. A break below that level could expose 0.8612, the 4 February low. At this point in 2025, EUR/GBP also struggled below 0.8700 as bearish momentum grew. Worries about weak Eurozone industrial data weighed on the Euro. This helped form a clear downtrend channel that traders tracked closely.

Shifting Macro Backdrop

In February 2026, the Eurozone picture looks different. Recent Eurostat flash estimates show core inflation remains sticky at about 2.9% last month. That makes it harder for the European Central Bank to hint at rate cuts. This is a change from last year’s weak factory output story and gives the Euro some support. In the UK, the focus has turned to a cooling economy. Wage growth slowed to 5.6% in the latest ONS report, down from above 7% in mid-2025. UK inflation also fell faster than expected to 3.4% in January 2026. Together, this raises the chance that the Bank of England cuts rates before the ECB. This shift in policy expectations is a big change from last year. With fundamentals changing, traders may consider positioning for a break away from the old downtrend. One approach is buying EUR/GBP call options with a strike near 0.8750, expiring in six to eight weeks. This offers limited risk while targeting a move higher if the data keeps diverging. To limit the risk if this view is wrong, traders could add a hedge for a deeper drop. Buying out-of-the-money put options, such as a 0.8600 strike, can help set a floor if UK data beats expectations or sentiment turns quickly. This keeps downside risk more contained while still allowing for upside exposure. Create your live VT Markets account and start trading now.

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The Japanese yen was recently the weakest currency in Asia. It has steadied since Prime Minister Sanae Takaichi won a snap election by a large margin on 8 February. After the result, USD/JPY fell from the top of its three-year range, moving down from 160 toward 140. Markets have focused on risks in Japanese government bonds (JGBs) and the budget impact of planned stimulus. Far less attention has gone to the inflation that stimulus could create.

Yen Stability After Election

Reports say Japan’s two largest banks may increase their JGB holdings. If they do, demand for government debt could rise, which can affect bond prices and yields. Rate expectations are also driving the yen. Markets are pricing: – a Bank of Japan rate hike in April, and – a US Federal Reserve rate cut in June. Now that politics look more settled, the yen appears to have regained stability. USD/JPY has moved down from recent highs near 160 after the Liberal Democratic Party’s win on February 8. This suggests investors may be looking past earlier concerns about government debt. The gap in central bank policy is becoming the key driver for USD/JPY. Markets are leaning toward a Bank of Japan hike at the April meeting, helped by last week’s Tokyo CPI data showing core inflation still firm at 2.7%. Meanwhile, the CME FedWatch Tool shows futures markets pricing an 85% chance of a Federal Reserve rate cut at the June meeting.

Options Strategy For Usd Jpy

This view supports a bearish outlook for USD/JPY in the coming weeks. Traders could consider buying USD/JPY put options to benefit if the pair moves lower. Options expiring in late April or May may capture the period when the Bank of Japan is expected to act. For a clearer, defined-risk setup, a bear put spread may fit. This means: – buying a put at a higher strike (for example, 150), and – selling a put at a lower strike (for example, 145). This reduces the upfront cost while setting a clear maximum profit and loss. It is worth remembering that through 2025, the common trade was to bet on a weaker yen as the US–Japan rate gap widened. Today, clearer politics and a shifting policy outlook point to a break from that trend. Another support for this stability is the expectation that large domestic banks will buy more JGBs. Create your live VT Markets account and start trading now.

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