🧠Tariff fatigue, softer dollar and Asia rotation reshape FX tone

Good morning traders from a crisp, mostly sunny IntelliTrade desk, where the day starts around 8–10°C with clouds drifting in and showers pencilled in for later. Perfect “two-coffee” weather while we unpack a softer dollar, stubbornly high gold, and a market that is rotating hard toward Asia and emerging markets.

Overall Market Sentiment

Sentiment this morning is cautious risk on with a side of fatigue. The broad US dollar index (DXY) is trading just under 97.8, down roughly 0.1 percent on the day and about 0.07 percent from yesterday’s close, still up around 1.3 percent over the past month but nearly 9 percent lower year on year.

Equity leadership has shifted. Asia and Europe are now on track to outperform US benchmarks for February, with the MSCI Asia Pacific index up about 7 percent and Europe’s main index up roughly 3.5 percent, while Wall Street is negative for the month as the AI scare trade and tech volatility weigh on US indices.

Safe-haven and hard assets are firm but not explosive. Gold is holding near 5,190–5,210 dollars per ounce, up about 0.2 percent today and on course for roughly 6–7 percent gains for February, after retracing an early-month flush.Brent crude trades around 71.2 dollars per barrel, up about 0.5 percent today and roughly 7 percent over four weeks, as prices balance Iran risk against signs of softer demand and rising inventories.

In crypto, Bitcoin is stabilising near 68,000 dollars, down less than 1 percent over 24 hours after a sharp relief rally earlier in the week. Volumes have thinned, positioning has de-levered, and options expiry is adding a layer of short-term noise, but the price action still looks like a high beta macro asset rather than a clean inflation hedge.

Geopolitics

Geopolitics is still a background driver rather than a new shock today. Two channels matter most:

1. Tariffs and trade policy
   

• Markets are increasingly treating the latest US tariff round as a chronic headwind rather than a fresh accident. Analyses of the new global tariff framework highlight that trade is being rerouted more than destroyed, but the combination of refund uncertainty, legal challenges and prospective new measures keeps a risk premium embedded in rates and FX.
• This uncertainty tends to pressure the dollar at the margin, because investors worry about US fiscal dynamics and longer term competitiveness, even as tariffs can be near-term inflationary.

1. 
   
2. US–Iran negotiations and energy risk
   

• Talks in Geneva have been extended, which has taken some upside pressure off oil in recent sessions, but analysts still estimate that around 10 dollars per barrel of risk premium sits inside current prices. Brent near 71 dollars and WTI around 66 dollars reflect that midpoint: not crisis, not calm.

For FX, this mix supports gold and the Swiss franc, limits how far the dollar can fall, and leaves commodity and high beta currencies quite sensitive to any sudden swing in headlines.

Today and the next week: key data and policy drivers

Today (Friday)

• The data focus is on US Producer Price Index (PPI) later in the session. Gold traders in particular are watching whether the metal can hold above the 5,200 region if PPI is firm, with several desks framing today as a test of whether the latest rebound is a consolidation or the start of another leg higher.
• In equities, the narrative is about digestion. After Nvidia-driven swings, Asian shares are mixed and European futures are slightly softer as investors reassess how much AI premium they are willing to pay and whether the recent rotation into Asia and emerging markets has run too far, too fast.

The next week ahead (week of March 2, 2026)

Next week is dense and should give markets a cleaner macro signal than day-to-day tariff chatter:

• Global PMIs
  
• Manufacturing and services PMI releases across major economies will provide an early look at March growth momentum. These survey data are central for the current narrative: are we in a soft landing with stabilising growth, or sliding into a slower, more fragmented cycle.
• 
  
• United States
  
• The big one is nonfarm payrolls on Friday, alongside the unemployment rate and average hourly earnings. After strong jobs data earlier this month, another solid print would support the idea that the Federal Reserve can stay patient, which in turn would keep real yields and the dollar from falling too far. Softer jobs and wages would nudge expectations toward earlier or deeper cuts.
• Trade data, ISM surveys and JOLTS will round out the picture on demand and labour tightness.
• 
  
• Euro area
  
• Flash inflation for the currency bloc plus GDP data for the eurozone and some key members (such as Italy) will be watched to confirm that disinflation is intact without tipping into stagnation. The balance between these prints will shape when markets expect the ECB to deliver its first cut.
• 
  
• United Kingdom
  
• UK releases on housing, activity and sentiment will refine the Bank of England path. With headline inflation already lower but services still sticky, next week’s data will influence whether the first cut is seen as a mid-year or later story.
• 
  
• Asia and Pacific
  
• In Japan, follow-through from this week’s stronger Tokyo CPI and retail data, plus commentary around the Bank of Japan outlook, will matter for the yen and for global rates.
• In Australia and New Zealand, GDP and further inflation or wage signals will either reinforce or challenge the idea that the RBA remains more hawkish than peers while the RBNZ stays cautious.
• 
  

Overall, next week is framed as a macro reset: if PMIs and US payrolls are solid while inflation behaves, the soft-landing, Asia-rotation, weaker-dollar narrative strengthens. If data roll over or PPI and wages run hot, the tariff and inflation worries that haunted February can easily re-assert.

Currency outlooks

🔻 USD – Dollar firm in levels but losing upside momentum

The broad dollar index is near 97.7, fractionally lower on the day and roughly flat versus a week ago, but still up about 1.3 percent over the month and down more than 9 percent compared with a year earlier.

The interesting shift is in real yields: the 10-year US real yield has dropped around 24 basis points from early February highs to roughly 1.72 percent, a move that has helped gold recover and taken some shine off the dollar’s safe-haven appeal.At the same time, US data remain broadly resilient and the Fed is not signalling imminent cuts, so yield differentials still work in the dollar’s favour versus low-yielders.

For the coming days, risks for USD look tilted slightly to the downside. If PPI today is contained and next week’s PMIs and payrolls point to solid but not overheating growth, markets have room to keep rotating into non-US assets and into gold, which would cap DXY in the 97.5–98.0 region. A surprise PPI or wage spike would quickly revive the “higher for longer” story and push the index back toward the top of this band.

🔺 EUR – Euro grinding higher inside a broader consolidation

EURUSD is trading around 1.180–1.181, modestly higher on the day and almost unchanged over the past week. Over the last 12 months the pair is still up nearly 14 percent, so the recent sideways action looks more like consolidation after a strong run than a full reversal.

Short-term analysis notes that EURUSD is clinging to a minor bullish trendline and repeatedly bouncing above support near 1.176–1.177, even as momentum indicators lose some steam.On the macro side, eurozone inflation near 1.7 percent and only modest growth keep the ECB in wait-and-see mode, which avoids an aggressive repricing against the euro.

Near term, risks for EUR versus USD lean mildly to the upside. The combination of a softer dollar, stable local inflation and a strong rotation into European and Asian equities favors EUR holding the 1.18–1.19 zone, with dips toward 1.176 likely seen as part of a range rather than a new downtrend unless next week’s data disappoint badly.

⚖️ GBP – Sterling cushioned by flows but facing mixed domestic signals

GBPUSD is quoted around 1.347, slightly softer than earlier this week but still well above the January lows near 1.335.

Technically, recent commentary has pointed to a break in one support trendline that could allow a deeper corrective phase, yet the pair has held up relatively well as the dollar stalled and global risk sentiment improved.Fundamentally, the UK sits in an awkward middle ground: headline inflation is falling, but services prices and wages remain sticky, while growth is sluggish. That leaves the Bank of England cautious and markets pricing a first cut in the middle of the year with plenty of room for repricing.

Given these cross-currents, risks for GBP versus USD look broadly balanced into next week. A friendly global risk tone and in-line PMIs could keep GBPUSD in a 1.34–1.36 corridor, while an upside shock to US price data or a negative UK surprise would put the lower part of that range back under pressure.

🔺 CAD – Loonie quietly supported by oil and range-bound USD

USDCAD trades around 1.367, near the middle of its recent range and just below the year’s highs.Brent near 71 dollars and WTI around 66 dollars provide a steady terms-of-trade tailwind for Canada, even as global growth worries ebb and flow.

Technical forecasts for USDCAD highlight repeated tests of resistance near 1.37–1.371, with expectations for a medium-term drift lower toward the mid 1.35s if that ceiling holds.With the Bank of Canada in no hurry to cut and tariff risks already in the price, the currency is increasingly driven by broad USD trends and oil.

For the coming days, risks for CAD versus USD are tilted toward modest Canadian strength. If PPI is benign and oil avoids a sharp breakdown, the market has room to push USDCAD toward the 1.36 handle, while a renewed risk-off move or hotter US data would likely keep it pinned near the 1.37 top of the recent band.

🔺 CHF – Franc remains a preferred safety valve in tariff world

USDCHF is trading near 0.773, close to the lower end of its one-year range and down roughly 14 percent year on year, which underlines how strong the franc has been through the tariff turbulence.

Intraday analysis notes that the pair is leaning on support from short-term moving averages and may see brief corrective pops toward 0.775–0.78, but the broader structure still points to a downtrend with lower lows likely if risk aversion or tariff stress re-intensify.With Swiss inflation low and the Swiss National Bank relatively comfortable with a firm currency, CHF retains its status as a high quality hedge.

Short term, risks for CHF versus USD lean toward further franc strength on rallies. Unless US yields jump or geopolitics calm markedly, USDCHF is more likely to test 0.77–0.768 than to stage a sustained move back above 0.78–0.782.

⚖️ JPY – Yen pulled between falling global yields and carry appeal

The yen is stabilising after a choppy week. USDJPY has been trading in the 155–156 area, with recent price action showing attempts to build a base above 154 followed by renewed tests of resistance near 156.5.

Tokyo CPI and retail sales surprised on the upside, and commentary today stresses that this has revived expectations for another Bank of Japan rate hike, which helped push USDJPY below recent peaks.However, the yield gap between Japan and the US remains wide and carry trades that fund in JPY are still attractive, especially while global risk sentiment is not in full risk-off mode.

For the next week, risks for JPY versus USD look mixed. Softer US real yields and any further BoJ hawkish hints would favour gradual yen strength and a drift toward 154–155, while hotter US data or a reversal in yields could quickly bring the 156–157 region back into play. Intervention risk will rise again if the pair pushes too far above that zone.

⚖️ AUD – Aussie cooling after CPI-driven breakout

AUDUSD is hovering near 0.71, slightly below its recent highs after a strong run driven by a hotter-than-expected Australian CPI print earlier in the week. Overnight price action shows some give-back as the pair struggles with resistance and a still-firm dollar.

The inflation data, with headline around 3.8 percent and trimmed mean at 3.4 percent, keep the Reserve Bank of Australia on a tightening-biased path, which should remain a structural positive for AUD relative to lower yielding peers.At the same time, tariff uncertainty and tech volatility mean that global risk sentiment can quickly swing against high beta currencies like the Aussie.

Given this balance, risks for AUD versus USD look broadly neutral in the very short term. Support is eyed near 0.705–0.706, with resistance around 0.715; next week’s global PMIs and US payrolls will decide whether carry and growth hopes dominate, or whether a stronger dollar re-asserts.

🔻 NZD – Kiwi bouncing from oversold but bigger downtrend not yet reversed

NZDUSD trades close to 0.599, after bouncing from lows near 0.597 and trying to offload oversold conditions flagged by momentum indicators.

Even so, the broader structure remains a bearish corrective channel, as emphasized in recent analysis. The RBNZ has kept rates on hold at 2.25 percent with a cautious, balanced tone, and the Kiwi remains highly sensitive to China and global trade headlines, both of which are clouded by tariff dynamics.

For the coming days, risks for NZD versus USD are still tilted slightly to the downside, despite today’s stabilisation. Unless next week’s global data deliver a strong pro-growth surprise or the RBNZ turns more hawkish, rallies toward 0.602–0.605 are likely to encounter selling, while a retest of 0.595 would not be surprising if the dollar tightens up again.

Cross-asset wrap

• 🪙 Gold:
  Gold is holding just under 5,200 dollars per ounce, up around 0.2 percent today and nearly 6–7 percent for February, as falling US real yields and ongoing tariff and Iran uncertainty keep strategic demand strong. The metal has repeatedly probed above 5,200 only to see profit-taking, so the key question into PPI and next week’s data is whether the market gains “acceptance” above that level or remains stuck in a broad 5,000–5,200 consolidation.
• 🛢 Oil:
  Brent is around 71.2 dollars and WTI about 66.3 dollars, heading for a small weekly decline despite Iran tensions, as the extension of US–Iran talks and a rise in US inventories cool the earlier spike. Analysts still talk about very wide scenario bands, from a de-escalation-driven drift lower to worst-case spikes toward 100 dollars plus if diplomacy fails, but for now prices look pinned in a high 60s to low 70s range.
• 📈 Stocks:
  Global equities are in a rotation rather than crash regime. Asia and Europe are poised to chalk up one of their best relative months versus US benchmarks in years, as investors seek markets viewed as less exposed to AI disruption and tariff headlines. US indices, still digesting tech volatility and layoff news, are lagging but not collapsing. Next week’s PMIs and US jobs report will be the deciding factor for whether this rotation persists.
• ₿ Crypto:
  Bitcoin is oscillating around 67,000–68,000 dollars, down slightly on the day after a strong bounce, with derivatives and ETF flows keeping volatility elevated. Spot volumes are lower than earlier in the year, and recent commentary stresses that the market is still in a fragile, post-deleveraging phase where thin liquidity can amplify moves. Macro-wise, BTC continues to trade as a high beta play on real yields, liquidity and risk appetite rather than a clean hedge against any single factor.

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

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