The Pound Sterling (GBP) shows potential for further rebound; however, it lacks sufficient momentum to reach 1.2730 against the US Dollar (USD). A drop below 1.2580 could suggest that the target of 1.2730 is unattainable at this time.

Recently, GBP fell from a high of 1.2690 two days prior, closing at 1.2666, a gain of 0.32%. Resistance levels include 1.2700 and 1.2730, with support at 1.2655 and 1.2635.

Despite a generally positive outlook for GBP over the next few weeks, upward momentum appears to be waning. A clear breach above 1.2730 is necessary for any further upward movement.

What we see here is that the Pound has shown some resilience, but that doesn’t mean it has enough strength to push much further without a solid catalyst. The recent retreat from 1.2690 suggests that buying pressure, while present, isn’t overwhelming. The fact that the currency closed at 1.2666 still reflects a net gain, but this comes with fading momentum.

Now, if prices slip below 1.2580, traders should take note. That would imply buyers are struggling to keep control, and it would shift expectations away from a move towards 1.2730. The fact that this target remains elusive unless there’s a decisive break above it means traders should hold back from assuming further upside is guaranteed.

Resistance levels are an area to be aware of. At 1.2700, we may see selling pressure increase, and that only intensifies closer to 1.2730. On the other hand, 1.2655 and 1.2635 are areas where buyers may attempt to step in again. If either of these support levels fails, it adds more weight to the argument that the Pound’s recent climb might be running out of steam.

The overall picture still leans towards some potential for gains, but confidence in further strength is not as solid as it was. Any move beyond 1.2730 would shift this entirely, opening the door for further advances. Without that, however, traders should be prepared for the possibility that the currency remains capped in the near term.

Donald Trump is scheduled to address the media at 9am US Eastern time.

He will then attend a Cabinet Meeting at 11am.

Later in the day, Trump will sign additional executive orders at 3pm.

On February 4, he signed an executive order related to Iran.

This schedule comes at a time when markets are reacting to broader economic signals and policy decisions from Washington. His remarks at 9am may include references to recent economic data, trade discussions, or other policy matters that could shift market sentiment. A strong or unexpected statement could move prices when markets open, particularly for assets sensitive to government policy.

The Cabinet meeting at 11am could provide further clarity on the administration’s approach to economic and geopolitical concerns. While the discussion itself will not be public, any statements given afterwards may hint at policy shifts or reinforce previous positions. Traders will be watching closely for any indications of adjustments in fiscal or regulatory plans.

Later in the afternoon, the signing of additional executive orders at 3pm introduces another moment that could push markets one way or the other. Executive orders have previously influenced key sectors, from energy to finance, and whatever is signed today may do the same. Past actions suggest decisions related to international trade, domestic regulation, or federal spending could be on the table.

Earlier this month, Donald signed an executive order related to Iran, which held implications for sanctions and broader market dynamics. Iran’s role in energy markets means any future decisions regarding that region could impact pricing in multiple asset classes.

Volatility around key announcements has been a feature of recent sessions. The next few weeks are likely to bring further reactions as different pieces of policy take shape. Those of us engaged with short-term moves will need to keep an especially close eye on what is said and done at these scheduled events.

The USD/JPY currency pair is trading near 149.40, with potential resistance expected due to anticipated interest rate hikes by the Bank of Japan. Traders are awaiting key Japanese economic reports on industrial production, retail sales, and Tokyo inflation, which are scheduled for release on Friday.

The Bank of Japan is projected to increase rates to 0.75% this year, with a full rate hike priced in by September and a 50% chance of an earlier move by June. Meanwhile, the US Dollar is gaining strength, driven by rising US Treasury yields, with the US Dollar Index approaching 106.50.

Currently, the 2-year and 10-year US Treasury yields stand at 4.11% and 4.32%, respectively. Additional economic developments include US President Donald Trump’s investigation into tariffs on copper imports and the confirmation of tariffs on Canada and Mexico after a one-month delay.

The Japanese Yen’s value is influenced by various factors, including the Bank of Japan’s policies, bond yield differentials, and broader market risk sentiment. The gradual unwinding of the Bank of Japan’s ultra-loose policies has recently supported the Yen against its peers.

At the moment, the USD/JPY pair is hovering near 149.40, yet resistance could emerge as traders react to expected rate hikes from the Bank of Japan. Many are watching closely for Friday’s economic data, which includes reports on industrial production, retail activity, and inflation in Tokyo. These releases should provide further clues on whether policymakers will indeed act on interest rates sooner rather than later.

Market expectations suggest rates in Japan will rise to 0.75% before the year’s end, with September fully priced in. There’s also a one-in-two chance of a move as early as June. If these forecasts hold, it could shift investment flows, influencing the Yen’s performance. On the other hand, the US Dollar has been strengthening, mainly because of rising Treasury yields. As it stands, the US Dollar Index is moving towards 106.50, supported by higher returns on government bonds.

Right now, the 2-year Treasury yield is at 4.11%, while the 10-year yield is slightly higher at 4.32%. These levels matter because yield differentials often dictate currency movements. If US yields keep rising while Japan’s remain low, capital is more likely to favour dollar-denominated assets. However, should Japan’s central bank take a firmer stance, the Yen might resist further weakening.

Elsewhere, US President Donald Trump has announced an investigation into tariffs on copper imports, an issue that could play into broader inflationary concerns. Meanwhile, after delaying them for a month, tariffs on Canada and Mexico have now been confirmed. Developments such as these ripple through various asset classes, particularly commodities and equities, which, in turn, influence currency markets.

Sentiment around the Japanese Yen is tied to multiple factors, including central bank policy, interest rate spreads, and overall market risk appetite. Over recent months, the unwinding of Japan’s extremely loose monetary stance has given the Yen some backing. Whether that continues depends on how policymakers proceed and how global investors react to upcoming data points.

January’s inflation data showed a y/y rate of 2.5%, slightly below estimates, consistent with the previous month, and in line with the Reserve Bank of Australia’s 2-3% target range. The core Trimmed Mean reading increased to 2.8% from December’s 2.7%.

These figures suggest that a rate cut by the Reserve Bank of Australia is unlikely in the near future, with attention on forthcoming quarterly data set for late April.

The AUD initially rose against the USD before declining, while the JPY followed a similar trend, falling to lows under 148.70 before recovering to around 149.50.

In the US, the House passed a budget bill supporting Trump’s 2025 agenda, which includes extending tax cuts and increased military spending. Chinese equities performed strongly, both on the mainland and in Hong Kong.

This latest inflation data reinforces the expectation that borrowing costs will remain steady in the short term. The central bank has little reason to lower rates while inflation stays within its preferred range. The uptick in the core measure hints at persistent price pressures, even though the overall annual figure remains stable. Markets will scrutinise the next set of quarterly figures in April for further confirmation of trends.

Initially, the currency’s jump suggested that traders interpreted the inflation figures as reducing the likelihood of an early rate reduction. However, the subsequent reversal indicates that other factors, such as broader risk sentiment and shifts in the US dollar, weighed on its performance by the end of the session. The movement in the yen followed a comparable pattern, with a dip below 148.70 before a recovery closer to 149.50. Changes in interest rate expectations, as well as external forces like US policy developments and global demand for safe-haven assets, contributed to the currency’s volatility.

In Washington, the House’s approval of a budget package aligned with Donald’s 2025 economic strategy added to market discussions around fiscal policy. Extending the current tax structure and directing more funds towards national defence remain core components, reinforcing higher government spending patterns. This approval process is being watched for its implications on growth and debt projections in the coming years.

Meanwhile, shares in Shanghai and Hong Kong extended their gains, aided by improved sentiment and signs of policy support. Stronger liquidity conditions and optimism surrounding economic measures helped sustain this momentum. Investors have shown a preference for beaten-down sectors as confidence in the local market recovers. The trajectory in these indices could influence broader risk appetite, particularly in the region’s related asset classes.

In January, South Africa’s Consumer Price Index (CPI) rose to 0.3%, up from the previous figure of 0.1%. This increase indicates a slight uptick in inflationary pressure.

EUR/USD traded around 1.0500 as it recovered from previous losses amidst a stronger US Dollar. GBP/USD likewise decreased towards 1.2650, reflecting ongoing challenges from the dollar’s firmness.

Gold prices stabilised above $2,900 following recent declines, spurred by concerns over US economic data. In the crypto sector, Maker’s price saw gains of nearly 12%, even as the overall market faced downturns.

Upcoming economic reports may centre around the implications of Germany’s elections and inflation figures important to the Federal Reserve.

A rise in South Africa’s CPI from 0.1% to 0.3% points towards a mild increase in inflation, which may influence policy expectations. If this trend continues, it could eventually affect interest rate decisions.

The euro’s movements against the US dollar reflect an ongoing struggle to regain momentum. Trading near 1.0500 suggests the recovery remains fragile. The British pound, sliding towards 1.2650, highlights that traders are still positioning based on the dollar’s strength rather than any inherent weaknesses in sterling itself.

Gold holding steady above $2,900 signals that investors remain cautious. Its price action has been shaped in part by US economic data, which continues to shift expectations on interest rate policy. If inflation in the US surprises, gold’s movements could become more volatile.

In crypto, Maker climbing nearly 12% is an outlier. Broader market sentiment has leaned negative, yet certain assets have defied this trend. When a singular token moves against the broader direction, it’s worth assessing whether it’s driven by internal factors, such as protocol developments, or speculative positioning.

Looking ahead, upcoming reports linked to Germany’s elections and fresh inflation data for the Federal Reserve will be closely monitored. Inflation numbers carry weight for rate expectations, and any surprises might influence broader market positioning. Those trading derivatives need to remain alert to these shifts, as they could dramatically alter price action across multiple asset classes.

Swati Dhingra, an external member of the Bank of England’s Monetary Policy Committee, is scheduled to speak on 26 February 2025 at 1630 GMT (1130 US Eastern time).

The event will occur at Britain’s National Institute of Economic and Social Research and will address trade fragmentation and its effects on monetary policy. Dhingra’s views generally align with a more accommodative stance within the committee.

Swati’s upcoming speech presents an opportunity to gain a deeper understanding of how she assesses wider economic shifts affecting monetary policy. Given her preference for a more accommodative approach, any reference to inflation persistence, labour market trends, or global trade disruptions will be relevant. If she acknowledges easing price pressures, this could reinforce expectations that rates may need to be adjusted earlier rather than later. Conversely, if she highlights lingering inflationary risks, markets will likely reassess the probability of near-term policy shifts.

Earlier statements suggest she has been wary of overtightening, arguing that economic slack could become a concern if borrowing costs remain too restrictive. Any indication that she views current settings as overly restrictive would strengthen the case for policy adjustments in the months ahead. However, if she signals patience, it would suggest that she believes further evidence is needed before changes should be made.

While broader discussions on trade fragmentation might seem detached from immediate policy decisions, they could offer insight into structural pressures shaping inflation trends. If she links ongoing trade disruptions to supply-side inflation, markets may take note, especially if she suggests this could limit the speed at which inflation moderates. On the other hand, if she argues that trade shifts might relieve pricing pressures over time, this would lend weight to expectations for adjustments sooner rather than later.

Other members of the committee have expressed varying opinions on when and how policy should respond to changing conditions. Should Swati’s speech align more closely with the more cautious voices, expectations of swift policy shifts may weaken. However, if she diverges from recent cautious remarks and leans towards earlier action, that will confirm her stance on the direction she believes monetary policy should take.

It will be essential to assess not just her broad statements but also the finer details. Any mention of specific data points, such as wage growth, consumer spending, or global supply chains, will provide further clarity on how she interprets recent trends. If she emphasises uncertainty, it may mean patience is warranted. Should she focus on downside risks to economic activity, this would reinforce arguments favouring adjustments sooner rather than later.

While Swati’s influence within the committee may not be decisive, her remarks will help shape expectations. Markets will be keen to gauge whether her tone shifts in response to recent data, and any divergence from prior comments will not go unnoticed. The reaction will depend on whether she signals that current conditions warrant faster adjustments or if she believes there is still more to assess before taking action.

The US Dollar (USD) maintained its position against other currencies on February 26, as markets monitored developments regarding Trump’s tariff policy. Upcoming US economic data includes New Home Sales figures for January, alongside speeches from Atlanta Fed President Raphael Bostic and Richmond Fed President Thomas Barkin.

This week, the USD displayed varied performance against major currencies, showing its weakest performance against the Swiss Franc, with a decrease of 0.41%. Falling US Treasury bond yields also affected the USD, following comments from Treasury Secretary Scott Bessent about spending reductions.

EUR/USD initially rose over 0.4% but lost momentum to trade just below 1.0500. GBP/USD saw minor gains, trading around 1.2650, while AUD/USD faced continuous losses, remaining below 0.6350 despite the annual Consumer Price Index (CPI) rising by 2.5% in January.

USD/JPY dropped nearly 0.5%, marking its lowest close since early October but saw a slight rebound near 149.50. Gold prices faced selling pressure, losing over 1% before stabilising slightly above $2,910 after hitting a weekly low at $2,888.

With the US dollar holding steady, attention remains on Trump’s tariff policy and upcoming economic data, including home sales figures and speeches from Raphael and Thomas. Traders will be listening closely to both Federal Reserve officials, as their remarks could hint at future monetary policy shifts. While bond yields have dipped in response to Scott’s mention of spending reductions, the broader impact on the currency market will depend on how investors weigh these remarks against upcoming data releases.

Given the mixed performance of the USD against major counterparts, traders navigating derivatives will need to pay close attention to individual currency movements. The drop against the Swiss Franc, for example, suggests a move towards safe-haven assets, often a response to uncertainty in US fiscal policy. Meanwhile, the euro showed some strength before reversing course, indicating a lack of follow-through by buyers. $1.0500 remains an important threshold, and further downside could prompt reassessment by short-term traders looking for opportunities in EUR-related instruments.

The British pound held modest gains, trading near 1.2650. Traders should watch for any new economic data from the UK that might change Sterling’s trajectory. A stable pound suggests confidence in the UK’s own economic outlook, but movements in US yields could still shift the balance. Meanwhile, the Australian dollar continues to struggle despite rising inflation, reflecting broader weakness, likely due to external factors like demand for commodities and signals from global central banks. The fact that it remains below 0.6350 suggests a lack of conviction from buyers, making it vulnerable to additional declines if sentiment worsens.

As for the Japanese yen, its brief drop of nearly half a percent pushed USD/JPY to its lowest level since early October before a slight recovery. This suggests that the yen remains a real alternative during moments of doubt in the dollar. However, any sustained movement below 149.50 could signal further yen strength, impacting how traders approach yen-related derivatives.

Gold prices saw a sharp decline of over 1% before stabilising just above $2,910. While it bounced after hitting a low of $2,888, the selling pressure here aligns with shifting risk sentiment. Those watching commodity markets may take this as an early sign of potential volatility, particularly if the dollar strengthens further.

The coming weeks will likely bring more fluctuations across these markets. Derivatives traders should be prepared for possible price swings driven by policy updates, bond yield movements, and fresh economic reports. Holding a clear plan will be key in adapting to rapid shifts in market direction.

Japan Post Holdings plans to sell shares in Japan Post Bank, valued at approximately 600 billion yen ($4.02 billion). This sale would reduce Japan Post’s stake below 50%, allowing the bank more operational flexibility and easing regulatory burdens.

This action supports Japan’s corporate governance reforms, which seek to enhance free-float shares. The final decision could occur within the week, alongside Japan Post Bank’s plans for a share buyback.

Japan Post currently owns 61.5% of Japan Post Bank, having previously reduced its stake in 2023. The bank reported a 17% increase in net profit for the nine months ending December, attributed to rising interest rates.

That increase reflects the broader impact of higher global rates, which have improved margins for financial institutions. With that in mind, we recognise how this sale fits within Japan’s broader push for better governance and stronger market liquidity. By reducing its ownership, Japan Post gives the bank greater independence, while also meeting government objectives of encouraging a more dynamic stock market.

Masatsugu Nagato and his team will want to time this sale carefully. Market conditions are currently favourable, with strong investor appetite for financial stocks amidst rising yields. However, selling such a large block of shares introduces concerns about short-term price fluctuations. Investors tracking this move will assess whether demand can absorb this supply without dampening the share price.

The planned share buyback adds another layer. If executed alongside the sale, buybacks could help stabilise Japan Post Bank’s stock, signalling confidence in its valuation. A coordinated approach would be advantageous, reducing excess selling pressure and providing assurance to investors.

Looking at the bank’s recent financials, the rise in net profit points to stronger revenue from interest-bearing assets. Higher rates globally have bolstered earnings, particularly for institutions with large fixed-income portfolios. Japanese banks, long weighed down by a low-rate environment, are seeing better returns, making them more attractive to shareholders.

Among policymakers, there is clear support for reforms that promote broader ownership and market liquidity. A diluted stake for Japan Post means more active investors shaping corporate decisions. That aligns with Japan’s wider targets of modernising corporate structures and attracting global capital. The government is likely to view this sale as another step in that direction.

For those monitoring this, attention should be on how the market reacts when the share sale details emerge. If investor demand is robust, the offering should be well received, limiting downward pressure on Japan Post Bank’s stock. On the other hand, if broader sentiment weakens, it may test the bank’s share price resilience in the short term.

EUR/GBP is experiencing downward pressure as Germany’s GfK Consumer Confidence Survey fell to -24.7 for March, down from -22.6. This figure is below market expectations and is the lowest since April 2024, indicating ongoing economic challenges.

Traders are monitoring the European Central Bank (ECB) ahead of expected interest rate cuts. ECB officials have suggested that subdued growth reflects changing economic realities, with the potential for further reductions if inflation approaches the target.

UK Prime Minister Keir Starmer has announced plans to increase defence spending to 3% of the nation’s economic output, sourcing initial funding from cuts in overseas development spending. This marks the largest increase since the Cold War.

Germany’s consumer confidence falling further is not a good sign for the euro. People are spending less, and companies may feel this downturn soon. When confidence is weak, we often see slower growth, and that puts pressure on policymakers. With inflation still in focus, the ECB has a tough decision ahead.

Some officials have already hinted that borrowing costs might need to come down. If inflation continues easing, rate cuts could arrive sooner rather than later. That means investors need to watch economic data closely—any surprises could move prices quickly.

On the other side, the UK appears to be taking a different approach, prioritising defence spending. Keir’s plan to shift money from overseas aid may create political friction, but markets will focus on the broader economic effects. A stronger commitment to domestic investment could influence long-term growth prospects.

For traders, central bank expectations and policy changes remain the key drivers. If rate cuts in Europe happen faster than in Britain, we might see a shift in momentum. The next few weeks will likely bring more clarity, but as always, unexpected announcements can quickly change the outlook.

Standard Chartered forecasts a further decline in Bitcoin, anticipating a drop into the low $80,000s. Despite its current resilience, Bitcoin is under pressure from a wider selloff in the cryptocurrency market, influenced by developments in Solana’s meme coin.

Analysts predict a near-term decrease of approximately 10%. They warn that although falling U.S. Treasury yields could eventually aid Bitcoin’s recovery, the present moment is not ideal for purchasing, particularly with Bitcoin ETFs possibly facing larger outflows.

Standard Chartered expects Bitcoin to retrace further, falling towards the lower $80,000 range. Right now, the price remains relatively stable, but broader selling pressure in digital assets is weighing on it. Part of this comes from market events linked to Solana-based meme coins, which have stirred sentiment and added to volatility.

A decline of roughly 10% in the near term is on the table, according to analysts. While lower U.S. Treasury yields could provide some support down the line, buying at this stage carries risk. Exchange-traded funds tracking Bitcoin may see heightened outflows, which could magnify selling pressure in the coming weeks. That alone is enough reason for many traders to take a step back before making any moves.

Recent price action suggests sentiment is mixed, even as Bitcoin stays above key technical levels. The market’s focus remains on short-term trends, with liquidity conditions tightening ahead of key data releases from the United States. Any unexpected shift in macroeconomic indicators could add to volatility, forcing traders to adjust positioning quickly.

Rising interest in leverage could also play a role. Open interest in Bitcoin futures has been building, which is often a sign that traders are looking for strong directional moves. If downside risks increase, liquidations could fuel sharper declines, making price swings more extreme. On the other hand, if support holds around $80,000, short positions may start to unwind, prompting short-term rebounds.

ETF flows are another factor shaping sentiment. Some funds have seen sustained withdrawals, adding weight to recent selling. Institutional participants remain active, but with capital moving cautiously, demand could remain subdued. That said, if outflows slow down or reverse, it might shift sentiment back in favour of buyers.

Keeping an eye on traditional markets is essential. Equities remain sensitive to central bank policy, and if broader risk appetite weakens, Bitcoin could feel the effects. Correlations have been inconsistent in recent months, but sudden moves in stocks or bond yields could still trigger reactions in digital asset markets.

In the next few weeks, attention will stay on price levels that attract strong buying and selling activity. Should Bitcoin continue its descent, psychological barriers could come into play, testing investors’ willingness to hold. If recent trends persist, volatility is likely to remain elevated, creating conditions where momentum shifts quickly.