Major currency pairs were little changed on Monday as US stock and bond markets were shut for Presidents’ Day. The week ahead includes UK jobs and inflation releases and the US PCE price index.
Iranian Foreign Minister Abbas Araghchi arrived in Geneva for a second round of US–Iran nuclear talks. The discussions focus on easing tensions and avoiding a new military confrontation, after Ayatollah Ali Khamenei warned of a possible regional conflict.
Major Pairs Snapshot
The US Dollar Index hovered 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, slipping ahead of upcoming data. Market attention also includes the FOMC Minutes later in the week and Canada’s January CPI on Tuesday.
Tuesday brings RBA minutes, Germany’s January Harmonised CPI, UK claimant count change, UK employment change, 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 added 1,136 tonnes of gold worth around $70 billion in 2022, the highest annual purchase on record. Gold often moves inversely to the US Dollar and US Treasuries, and is priced in dollars (XAU/USD).
We are looking at a much different market landscape today, on February 17, 2026, than what we saw this time last year. Back in February 2025, markets were quiet ahead of key inflation data, a pattern we see repeating now as we await this month’s PCE figures. The crucial difference is the starting point for assets after a year of significant shifts.
The US Dollar Index, which was hovering around 97.10 last year, is now trading substantially higher, currently near 104.50. This year-long strength reflects the Federal Reserve’s commitment to maintaining higher interest rates to manage inflation, which, according to the latest January 2026 data, has cooled to 2.4% but remains above the 2% target. Traders should consider that long-dollar positions have been profitable, but the potential for a policy pivot is now the market’s main focus.
This dollar strength has pressured other majors, with EUR/USD now trading near 1.07, a stark contrast to the 1.1850 level seen in February 2025. The divergence in policy between the Fed and the European Central Bank, which has signaled potential rate cuts, continues to weigh on the pair. Volatility options on EUR/USD could be valuable as we approach the next central bank meetings.
Looking back, the high-stakes nuclear talks with Iran created an undercurrent of geopolitical risk last year. While those specific talks eventually stalled, similar tensions in other global hotspots have persisted, keeping risk management at the forefront of our strategy. We must continue to price in the potential for sudden market moves based on geopolitical headlines.
The Japanese Yen has been a complex story, with USD/JPY trading near 153.50 in February 2025. Today the pair is closer to 150.00, reflecting the Bank of Japan’s gradual shift away from its ultra-loose monetary policy throughout late 2025. This has made shorting the yen a less certain trade than it was a year ago.
We see a similar story in GBP/USD, which has fallen from 1.3630 last year to around 1.25 today. The political stability that emerged under PM Keir Starmer in early 2025 did little to fend off the effects of stubborn UK inflation. Current inflation figures from January 2026 show UK CPI at 3.8%, which remains a significant headwind for the pound.
The price of gold presents the most dramatic change from the environment in February 2025, when it was trading near a remarkable $4,991 per ounce. Today, gold is priced closer to $2,350, suggesting the extreme safe-haven demand seen last year has substantially unwound. This indicates that options strategies betting on lower volatility, such as short strangles, might be more appropriate now.
Central bank purchases, a major driver of gold demand, have continued, though at a more moderate pace than the record-breaking levels seen in 2022. The World Gold Council’s most recent data for the full year of 2025 shows central banks added another 800 tonnes, a robust figure that nonetheless could not sustain the price peaks from that period. This trend suggests a solid floor for gold prices but a lower ceiling than last year.
This week, we are focused on Canadian inflation data and the minutes from the US Federal Reserve, much like we were in 2025. The key release, however, will be the US Core PCE data on Friday. This will give the clearest signal on the Fed’s next move and will likely set the trading tone for the coming weeks.
