FX Markets Quiet Ahead of This Week’s Important Data and Events

Here’s what you need to know for Monday, February 16:

Major currency pairs begin the week trading within established ranges, as investors remain cautious ahead of several key events and important macroeconomic releases scheduled for later in the week. In Europe, December Industrial Production figures are due on Monday. Meanwhile, US stock and bond markets are closed for the Presidents Day holiday.

The US Dollar Index ended last week on a softer note, as below-forecast inflation data prevented the greenback from gaining momentum before the weekend. According to the US Bureau of Labor Statistics, annual Consumer Price Index (CPI) inflation slowed to 2.4% in January from 2.7% in December, undershooting expectations of 2.5%. Early Monday, the USD Index is moving sideways around the 97.00 mark during European trading hours.

Early Monday, CBS News reported—citing two sources—that US President Donald Trump told Israeli Prime Minister Benjamin Netanyahu he would back Israeli strikes targeting Iran’s ballistic missile program. So far, markets have shown little reaction, with West Texas Intermediate crude trading largely flat near $62.80 per barrel.

EUR/USD remains in consolidation mode, hovering just above 1.1850 after ending last week slightly higher. European Central Bank policymaker Joachim Nagel is expected to speak later in the day.

In Asia, Japan’s data showed that fourth-quarter Gross Domestic Product (GDP) expanded at an annualized rate of 0.2%, rebounding from a 2.6% contraction in the prior quarter but missing the 1.6% growth forecast. After dropping nearly 3% last week, USD/JPY is recovering modestly, up 0.4% on the day to trade near 153.30.

AUD/USD trades in a tight range below 0.7100 in European hours. The Reserve Bank of Australia will release minutes from its February meeting early Tuesday, when it raised the policy rate by 25 basis points to 3.85%.

Gold surged on Friday and closed the week higher, though XAU/USD is struggling to maintain upward momentum and is trading below the $5,000 level on Monday morning in Europe.

The UK’s Office for National Statistics is set to publish employment data on Tuesday. GBP/USD remains subdued, edging slightly below 1.3650.

Finally, Statistics Canada will release January CPI data on Tuesday. USD/CAD trades steadily around 1.3600 in European hours after posting modest losses last week.

Sources: Eren Sengezer