← Back to posts🧠Dollar tests key levels as RBNZ jolts kiwi and minutes loom

🧠Dollar tests key levels as RBNZ jolts kiwi and minutes loom

Published: 2/18/2026

Good morning traders from a snow-dusted IntelliTrade desk, where it is hovering around 0°C, the flakes are turning to low clouds, and the charts look about as grey as the sky. Grab that warm mug, because between central bank minutes and a fresh RBNZ surprise, today’s session deserves your full attention.


Overall Market Sentiment



Market tone is cautious but not outright risk off. The US Dollar Index (DXY) is nudging higher around 97.2, up slightly on the day but still roughly 2.2% weaker over the past month and about 9% lower over 12 months, so we are talking about a tactical rebound inside a broader downtrend.


EURUSD is trading near 1.18–1.185, a touch softer after yesterday’s grind lower, though still up almost 14% year on year.GBPUSD sits around 1.356, having slipped back into the mid-1.35s as traders brace for UK CPI and the FOMC minutes.


Overnight, the RBNZ held rates at 2.25% but pushed back against some of the more aggressive tightening hopes. That sent NZDUSD sliding back toward 0.60, briefly dipping under the figure.


Across assets, gold is under pressure again. Spot has slipped roughly 0.6–0.7% today, trading just above 4,900 dollars, after briefly dropping toward 4,870 earlier in the session.Brent crude is steady around 67.5 dollars a barrel, inside the tight 66–69 band that has defined February so far.


Equities are trying to stabilise. The S&P 500 eked out a gain of about 0.1% yesterday, while the Nasdaq also finished marginally higher in a still-choppy tech tape.Bitcoin trades around 67–68 thousand, down on the day but still well above the lows from earlier in the month, with ETF flows and official holdings now playing a major role in the narrative.





Policy and data: today and the rest of the week




Today (Wednesday)



  • The spotlight is on FOMC minutes later today. Markets want more detail on how close the Federal Reserve thinks it is to a first cut and how worried policymakers are about still-sticky service inflation.
  • The RBNZ decision has already set the early tone in FX. The central bank held the cash rate at 2.25%, but its projections showed a less aggressive future tightening path than markets had pencilled in, which knocked the kiwi lower.
  • In Europe, attention is on German and euro area sentiment data, which will help confirm whether the region is inching out of its industrial slump or still stuck in low-growth mode.




The rest of this week



United States

  • The main event is Friday’s combo of Q4 GDP and core PCE, with consensus around 2.8% annualised growth and 0.3% month on month core PCE. This pair will go a long way in confirming whether markets are right to expect rate cuts around mid-year, or whether those expectations have run ahead of the data.


United Kingdom

  • It is a heavy UK data week, with CPI and other releases feeding directly into Bank of England rate expectations. Sterling is already under pressure into these numbers.


Canada

  • Canada’s CPI for January has just eased to about 2.3% year on year, a touch softer than expected. Markets read this as consistent with the Bank of Canada’s cautious stance, but USDCAD has still pushed higher on broad dollar strength.


Japan

  • After a weak Q4 GDP print, the focus now shifts to trade and inflation data that will either reinforce expectations for a very slow Bank of Japan normalisation or allow talk of a slightly quicker move away from ultra-easy policy.


New Zealand

  • Markets will continue to digest today’s RBNZ decision and updated track. The key question now is whether the next move is still seen as a hike or whether a prolonged hold is more likely.




Overall, this is a week where central bank communication plus GDP and PCE data decide whether the dollar’s recent rebound has more room or starts to fade again.





Currency outlooks




⚖️ USD – Dollar testing a rebound inside a bigger downtrend



The dollar is sitting near an important inflection point. DXY around 97.2 is only marginally higher on the day, yet it comes after testing four-year lows near 95.5 in January. Over the past month the index is still down about 2.2% and over the past year around 9.3%, which keeps the longer-term trend lower even as the short-term chart shows a tentative breakout.


Positioning is heavily skewed against the dollar, with surveys showing some of the most bearish USD allocations in more than a decade. That means the risk of short squeezes is high if Fed minutes, GDP or PCE come in on the strong side.


For the rest of this week, risks for USD look finely balanced. A combination of dovish minutes and soft core PCE would support a move back toward the 96.5 support area, while a more hawkish tone or firmer inflation could keep the rebound alive toward the 97.6–98.0 zone that many technicians watch as near-term resistance.





⚖️ EUR – Euro drifts lower, still supported by past gains



EURUSD is trading near 1.184, down a touch on the day, as markets respond to a slightly firmer dollar and some profit taking after a strong multi-month rally. Over the past month, the pair is still up about 1.7%, and over the last year roughly 13–14%, so the euro remains in a broadly constructive trend even if momentum has cooled.


This week’s euro area surveys and PMIs will show whether the region is gradually emerging from its manufacturing funk or staying stuck in a low-growth regime. If the data confirm gentle improvement, investors are likely to keep favouring EUR on dips versus currencies backed by more dovish central banks, even while acknowledging that the ECB is also on a long plateau.


For the next few days, risks for EUR versus USD look mixed. Data in line with expectations on both sides of the Atlantic would probably keep the pair oscillating in the 1.18–1.19 range, with 1.18 as support and 1.19–1.20 as resistance. The main swing factor is whether Fed minutes and PCE shift the US leg of the story more than euro data move the European one.





🔻 GBP – Pound remains vulnerable into UK CPI and Fed minutes



GBPUSD is around 1.356, very close to yesterday’s level but down from last week’s highs, and intraday commentary continues to describe the pair as “vulnerable” in the mid-1.35s.


The immediate catalyst is the UK CPI release and broader data pack this week, which will drive expectations for how quickly the Bank of England can continue easing after having already cut rates to support weak growth. The bar for a positive surprise is quite high, because markets already assume that price pressures are cooling.


Against a background of cautious risk sentiment and central bank divergence, risks for GBP versus USD are tilted to the downside in the near term. Market participants are focused on 1.35 as the next psychological support, with a broader support band down into 1.34, while any spike back toward 1.38 is likely to encounter selling interest unless both UK data and Fed minutes align in sterling’s favour.





🔻 CAD – Loonie pressured as softer CPI meets firmer dollar



The Canadian dollar has slipped after today’s inflation data. USDCAD is trading around 1.365, up from recent lows near 1.35, having posted several days of gradual gains as the dollar firmed and Canada’s CPI eased.


January inflation cooled to about 2.3% year on year, slightly below expectations and right in the middle of the Bank of Canada’s target band, which gives policymakers room to stay patient or edge toward cuts later if growth disappoints. At the same time, the global dollar rebound and upcoming US data are encouraging some participants to add back USD exposure versus cyclical currencies like CAD.


For the rest of the week, risks for CAD versus USD lean mildly toward further CAD weakness. If Fed minutes and PCE surprise hawkish, USDCAD could press deeper into the 1.37 area, while a soft US profile and steady oil prices would help cap the move and potentially pull the pair back toward 1.35–1.355.





🔻 CHF – Franc still strong but near term bias tilts to USD



The Swiss franc remains firm in a big-picture sense, but the very short-term tone has shifted a little. USDCHF is trading around 0.771, just below recent local highs near 0.773–0.774, as the pair edges up toward a widely watched resistance zone.


Domestic conditions in Switzerland are steady, with low inflation and modest growth, so CHF is still attractive as a long-term safe haven. However, near term flows reflect a combination of mild dollar recovery and some unwinding of very crowded franc longs, particularly with FOMC minutes and US data looming.


Over the next few days, risks for CHF versus USD are tilted slightly toward further franc softness, especially if US yields drift higher on the back of the minutes and PCE. Markets are watching the 0.772–0.775 band as key resistance, with a sustained break opening room toward 0.78–0.79, while a quick return of risk aversion or a dovish Fed tone would likely drag USDCHF back toward the 0.765–0.77 area.





⚖️ JPY – Yen gets some help from exports but yield gap still dominates



The yen trades around 153 per dollar, little changed on the day, after an overnight mix of stronger Japanese export data and continued focus on the wide US-Japan yield gap.


Rising exports, helped by demand for chips and autos, support the idea that Japan can live with a slightly firmer currency over time, and they keep expectations alive for another small Bank of Japan move later this year. At the same time, US yields remain well above Japanese ones, and the Fed is still some distance from its first cut, which keeps carry trades attractive.


In the short run, JPY risks versus USD look broadly balanced. Weaker US data and a dovish tone in the minutes could push USDJPY back toward the 151–152 region, while any hawkish surprise or renewed risk rally would quickly bring the 155–156 levels back into view, where Japanese authorities tend to watch the tape more closely.





🔺 AUD – Aussie still supported, even as momentum cools



AUDUSD is trading near 0.707, fractionally lower today but still up more than 5% over the past month and about 11% over the past year.The currency remains supported by a relatively hawkish RBA, which has lifted rates to 3.85% and continues to signal concern about inflation, even as labour data raise questions about how much further it can go.


Short-term reports describe AUDUSD as “gathering positive strength” again today after holding above key trend support around 0.702–0.703, which lines up with the January uptrend.


For the rest of the week, risks for AUD versus USD remain modestly tilted to the upside, provided Fed minutes and US data do not deliver a strong shock in favour of the dollar. The 0.70 area is still seen as important support, while 0.71–0.715 is the resistance band where some investors may take profit if tested again.





🔻 NZD – Kiwi knocked lower after a less hawkish-than-hoped RBNZ



The New Zealand dollar is under pressure after today’s policy decision. NZDUSD has dropped back toward 0.60, with intraday lows close to the figure, as the RBNZ held the cash rate at 2.25% and signalled a more modest future tightening path than markets had priced.


The bank still expects inflation to return to target and did not open the door to cuts, but it also pushed back against the notion of an imminent new hiking phase. That repricing, on top of a slightly firmer dollar and choppy global risk sentiment, has unwound a chunk of the kiwi’s recent outperformance.


Near term, risks for NZD versus USD lean to the downside. Unless US data significantly undershoot or global risk appetite improves quickly, the path of least resistance is for NZDUSD to consolidate in a 0.595–0.605 range, with any deeper slide toward 0.59 likely to attract more two-way interest as investors reassess the medium-term story.





Cross-asset wrap



  • 🪙 Gold:
    Spot gold has slipped back below the 5,000 mark, trading just above 4,900 dollars per ounce after an earlier dip toward 4,870. Intraday commentary highlights a combination of profit-taking, slightly firmer DXY and thin post-holiday liquidity as key drivers. The metal remains highly sensitive to Friday’s core PCE print: softer inflation would give gold room to rebuild a base around 5,000, while a firm reading that lifts real yields could keep it pinned in the 4,800–4,950 band.
  • 🛢 Oil:
    Brent crude is trading around 67.5 dollars, up marginally on the day and firmly within the 66–69 corridor that has defined February. Markets are balancing the risk of higher Middle East tensions and US–Iran talks against evidence of comfortable supply and a possible medium-term surplus. For FX, this level of oil is noticeable but not yet a game-changer: it nudges headline inflation but does not force central banks to rewrite their plans.
  • 📈 Stocks:
    US stocks managed a small gain yesterday, with the S&P 500 up about 0.1% and the Nasdaq also higher, but the tone is still fragile as investors juggle AI-related earnings worries with hopes for a soft landing. This week’s trio of Fed minutes, GDP and PCE will be crucial in deciding whether equities can keep grinding higher or whether the recent volatility is the start of a more significant de-rating.
  • ₿ Crypto:
    Bitcoin is trading around 67,000–67,500 dollars, down roughly 1–2% over 24 hours, with sentiment gauges still in fear territory. Spot ETFs continue to hold substantial assets, even after the earlier price crash, which shows underlying structural demand but also means institutional flows and official sector actions now have outsized influence. As with other risk assets, BTC is watching the Fed minutes and PCE for clues on the future path of real yields and dollar liquidity.






This is general, educational macro and FX commentary. It is not investment advice and not a trading signal.


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