U.S. dollar gains as traders await Fed minutes, key U.S. macro data

Vijay Valecha, February 17, 2026, Middle East Economy

The U.S. dollar maintained its upward momentum on Tuesday as investors looked ahead to signals later in the week regarding when the Federal Reserve might begin cutting interest rates again.

The dollar index, which tracks the U.S. currency against a basket of major peers, edged 0.24 percent higher to 97.15 after rising 0.2 percent in the previous session. Meanwhile, the euro slipped 0.11 percent to trade at $1.1839.

Q4 GDP data in focus

The yen pared back some of the previous session’s losses, which had followed weaker-than-expected Japanese economic figures that fueled speculation over increased government stimulus. Meanwhile, the Australian dollar slipped slightly after minutes from the Reserve Bank of Australia indicated that policymakers were not in a hurry to tighten monetary policy further.

The yen fell 0.36 percent to trade at 152.95 against the U.S. dollar, while sterling slipped 0.11 percent to $1.3607.

“Last week, the U.S. dollar declined 0.82 percent, ending Friday slightly lower by 0.04 percent. After the CPI release, inflation eased from 2.7 percent in December to 2.4 percent in January, reviving expectations of interest rate cuts in the first half of 2026 and weighing on the dollar,” said Vijay Valecha, Chief Investment Officer, Century Financial.

Trading volumes were subdued, with several Asian markets closed for the Lunar New Year holiday and U.S. markets having observed the President’s Day holiday. Investors are now turning their attention to key economic releases later in the week, including minutes from the Federal Reserve’s latest meeting and preliminary data on U.S. gross domestic product.

“Focus will shift to upcoming data, including ADP private payrolls on Tuesday and the Fed meeting minutes, which could provide fresh insight into the economic outlook. On Friday, Q4 GDP data will offer further clarity on growth momentum,” added Valecha.

Yen dips on marginal Q4 economic growth

Figures released on Friday showed U.S. consumer prices rose by less than anticipated in January, giving the Federal Reserve greater room to ease monetary policy later this year. Money markets are currently pricing in roughly 59 basis points of rate cuts over the remainder of 2026.

Minutes from the Fed’s January meeting are due on Wednesday, offering investors further insight into policymakers’ thinking. Elsewhere, markets will monitor inflation data from the U.K., Canada and Japan, along with preliminary global business activity readings scheduled for Friday.

The yen’s recent advance lost momentum on Monday after official data revealed Japan’s economy recorded only marginal growth last quarter. The currency is still trading around 4 percent weaker against the U.S. dollar compared with levels seen before Sanae Takaichi took office as prime minister last year.

The Australian dollar slipped 0.10 percent against the U.S. dollar to $0.7064. Meanwhile, New Zealand’s kiwi was up 0.03 percent at $0.6031 ahead of the Reserve Bank of New Zealand’s policy decision on Wednesday, where policymakers are widely expected to keep interest rates unchanged.

Minutes from the Reserve Bank of Australia’s most recent meeting showed board members were divided over the need for additional rate increases, while underscoring that inflation has remained above target for the past three years.

Source

Middle East Economy