Currency Market Update - Week ending 2026-02-08

A concise, plain-English FX brief: pay/split/wait guidance, central-bank stance, key levels, and the next two weeks of dates that matter—built for invoices, remittances and travel.

Market Summary & Cross-Market Themes

The US dollar stayed firm into early-February as yields held steady and markets refocused on upcoming US inflation data. European currencies traded range-bound, the yen stayed soft as Japan’s normalization remains gradual, and commodity FX was mixed as China’s impulse improved only in patches. Risk appetite was choppy, with equities resilient and oil supported by geopolitical headlines. The US Dollar Index (DXY) remains mid-range, keeping most pairs inside familiar corridors ahead of key data.

• USD/yields: Stable US yields underpin USD; inflation prints remain the pivot for the next leg.

• Risk tone: Equities steady; safe-haven demand muted but flickers on geopolitical risk.

• China impulse: Uneven recovery; commodity demand patchy, capping AUD/NZD rallies.

• Policy divergence: Fed/ECB/BoE eye gradual cuts if inflation cooperates; BoJ slow, supportive of a softer JPY.

What this means for you (Week ending 2026-02-08)

• Expats: Split transfers; add on dips if EUR/USD nears 1.07 or USD/JPY near 150.

• Travelers: Buy USD on pullbacks; trim if GBP/USD reclaims 1.28 or AUD/USD 0.67.

• SMBs: Hedge 50–70%; top up near ranges: EUR/USD 1.07–1.10, USD/JPY 146–150, USD/CAD 1.33–1.36.

Week-in-Review (price moves & drivers)

• USD: Firm on steady yields and solid US growth resilience ahead of CPI.

• EUR: Range-bound; softer energy helps but growth lag persists against the US.

• GBP: Supported by sticky services inflation expectations; BoE cautious on cutting.

• JPY: Soft; BoJ gradualism and steady US yields keep [USD/JPY] elevated.

• AUD: Capped by uneven China data; iron ore off highs limits upside.

• NZD: Mixed; softer domestic momentum, dairy stabilizing supports floor.

• CAD: Sideways; oil underpins CAD, but US data keeps USD bid.

• SGD: Stable; MAS stance steady, Singapore core inflation sticky.

Central-Bank Path Updates

• Fed: Data-dependent; markets lean toward gradual cuts later in 2026 if inflation cools.

• ECB: Cautious; cut cycle likely slower given wage stickiness and fragmented growth.

• BoE: Hawkish hold vibe; needs clearer disinflation before easing pace quickens.

• BoJ: Normalization slow; watching wages and inflation breadth before further steps.

• RBA: Patient; inflation easing but services sticky, trims at a measured pace later.

• RBNZ: Hawkish bias fading; room to ease in H2 if demand slows.

• BoC: Slight easing bias; monitoring growth softness vs still-elevated shelter inflation.

• MAS: Hold on slightly tight settings; April review guided by core inflation trend.

Data Recap vs Consensus

• US: Services firm; labor mixed; inflation watch ahead—surprises will drive USD.

• Eurozone: Inflation cooling gradually; growth indicators subdued but stabilizing.

• UK: Wage pressure sticky; growth soft—mixed signals for BoE timing.

• Japan: Wages and services inflation in focus; BoJ patient.

• Australia: Inflation eased from highs; domestic demand uneven.

• New Zealand: Labor market cooling; inflation expectations inch lower.

• Canada: Activity moderate; shelter costs keep inflation elevated.

• Singapore: Core inflation steady; external demand improving slowly.

Large FI Forecasts (Snapshot; next 1–2 quarters)

Forecasts are directional guidance only, not advice. Views aggregated across several large FIs (Goldman Sachs, JPMorgan, Citi, UBS, HSBC, Barclays, BNP Paribas, Deutsche Bank).

Positioning in the Market

• Crowd leaning pro-USD vs JPY and EUR; room for pullback if US CPI cools.

• Fast squeeze higher in EUR and JPY possible if yields drop on soft US data.

• Options show demand for protection against sharp USD/JPY downside swings.

Commodities & China/Middle-East Linkages

• Oil supported by Middle East risks; CAD and some EM Asia benefit on dips.

• Iron ore off peaks as China property support is uneven; caps AUD upside.

• Dairy stabilizing helps NZD floor, but global demand still soft.

Per-currency: What it means for you

USD

• SMBs: Importers, pay now if EUR/USD slips near 1.07; otherwise split.

• Expats/Travelers: Add USD on dips; trim above USD/JPY 150.

EUR

• SMBs: Collect USD receivables if [EUR/USD] below 1.08; wait toward 1.10.

• Expats/Travelers: Buy EUR on weakness near 1.07; split transfers otherwise.

GBP

• SMBs: Hedge GBP receipts near GBP/USD 1.28; add above 1.30.

• Expats/Travelers: Buy GBP on dips to 1.25; stagger if 1.27–1.28.

JPY

• SMBs: Pay USD early if [USD/JPY] above 149; split toward 146–147.

• Expats/Travelers: Convert to JPY on spikes near 150; wait closer to 147.

AUD

• SMBs: Buy AUD hedges near AUD/USD 0.65; add on 0.64 dips.

• Expats/Travelers: Top up AUD near 0.64; wait for 0.67 test otherwise.

NZD

• SMBs: Stagger NZD buys 0.60–0.61 on NZD/USD; lighter above 0.62.

• Expats/Travelers: Add NZD on dips to 0.60; wait toward 0.62.

CAD

• SMBs: Pay CAD invoices if USD/CAD near 1.36; split at 1.34.

• Expats/Travelers: Convert to CAD on 1.35 spikes; wait nearer 1.33.

SGD

• SMBs: Lock SGD costs if USD/SGD near 1.36–1.37; split at 1.34.

• Expats/Travelers: Add SGD on 1.36 spikes; wait near 1.33.

Scenario → Action Matrix (1-week)

Next 2 Weeks — Key Data & Events

Sources: Federal Reserve, European Central Bank, Bank of England, Bank of Japan, Reserve Bank of Australia, Statistics Canada, Office for National Statistics, Bloomberg, Reuters.

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💡 Tip: Late-year volatility can spike with thin liquidity—set BER rate alerts to catch quick reversals.

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Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.