The dollar was mixed into month-end on Friday, with haven currencies gaining support as AI and Iran concerns dampened risk appetite. U.S. President Donald Trump said he was not happy with Iran and wants to make a deal with Tehran but warned that "sometimes you have to" use military force, helping to support oil and gold into U.S. and Iran talks next week. U.S. producer prices unexpectedly accelerated in January, with the annual pace running at a 2.9% annual rate versus the 2.6% forecast. Treasury yields fell, pushing the 10-year yield to a year-to-date low below 4%. U.S. data next week includes PMIs, ISM readings and the February jobs reports. OpenAI's latest funding round amounted to $110 billion from Big Tech.

The dollar index continues to consolidate below its 55-day moving average and above its 21-day moving average. High levels of option convexity hint at volatility in March.

EUR/USD reversed an early drop after PPI and tested its 21-DMA at 1.1824 before paring gains. EUR/CHF slid 0.5% on haven-related selling.

GBP/USD approached its February low of 1.3435 as geopolitical tension, a firmer U.S. PPI, risk-off tone, and lingering U.K. fiscal concerns weighed. Bank of England Chief Economist Huw Pill said the central bank should not be too reassured by falls in headline inflation. Separately, British Prime Minister Keir Starmer pledged to fight political "extremes" after his Labour Party suffered a humiliating election defeat.

USD/JPY trimmed its earlier drop as haven demand and higher oil lifted the dollar though sub-4% 10-year Treasury yields and soft volatility kept it below a thinning daily cloud at 156.53–157.44.

AUD/USD rose amid easing U.S. yields, strong gold and silver gains with rising RSIs, supporting it above the 10- and 21-DMAs.

Treasury yields were down 4 to 7 basis points as the curve steepened. The 2s-10s curve edged up about 1 basis point to +57.5bp.

The S&P 500 fell 0.80% as tech and financial shares fell.

WTI oil jumped over 2% to its highest level since August.

Gold rose 1.1%, silver jumped over 5% and copper gained 0.6%.

Heading toward the close: EUR/USD +0.19%, USD/JPY -0.13%, GBP/USD +0.01%, AUD/USD +0.13%, DXY -0.21%, EUR/JPY +0.06%, GBP/JPY -0.14%, AUD/JPY +0.01%.(Editing by Burton Frierson Reporting by Robert Fullem)

Morgan Stanley Research maintains a bearish and short position in EUR/CHF in spot.

"We think our 12m forecast of 0.87 in EUR/CHF stands in sharp contrast with consensus and market pricing. We estimate a decline of EUR/CHF to 0.87 over 12 months is only priced at about a 25% probability, for example. Meanwhile consensus forecasts place EUR/CHF modestly higher, not lower, over the next 1-2 years," MS notes.

"This underpricing suggests CHF longs are attractively priced as a hedge for risk-oriented portfolios - and as a safe haven hedge against the risk of unexpected and large shocks. EUR/CHF shorts are attractive, in our view, and we continue to recommend short EUR/ CHF positions targeting 0.87," MS adds

• AUD/USD holding firm with dips remaining shallow - 200HMAs provide near-term floor

• Though the pair still looks constructive as these levels hold (0.7077-80)

• Positioning is still a headwind worth respecting. Crowded bets make for a choppy trade

• However, they create asymmetric pullbacks when they unwind

• Overnight, the PBoC dropped the FX forward risk reverse ratio from 20% to zero

• This is a signal that Beijing is not comfortable with the pace of yuan gains

• That said, history shows the trend does not flip immediately

• At the margin, this is a slight yuan negative, thus a potential drag for AUD
audusd


CNH and FX reserve ratio


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

Bank of America Global Research discusses EUR/USD outlook. 

"Supreme Court decisions, Federal Reserve announcements, and most recently, a potential runup to further military action in Iran have been among the headlines to roil markets just in the past few weeks. Meanwhile, equities have become more ambivalent around the prospects of AI for markets," BofA notes.

"Yet for all the headlines, we have not yet seen a more persistent impact in broader G10 FX views despite the recent shorter term volatility. EUR-USD is only slightly higher from where we finished year-end, and in general we continue to expect modest broad USD downside over the medium-term. We still look for EUR-USD to be at 1.22 at the end of the year," BofA adds.

• Cable elicits support by 1.3435-39 after risk aversion-spurred drop

• Feb 20 low was 1.3439, before the pound rose on UK flash PMI beats

• 1.3435 was four-week low on Feb 19. GBP is risk-sensitive; USD safer-haven

• London morning range was 1.3462-1.3509, after Labour's by-election loss

• U.S. producer prices increase more than expected in January

• BoE should not be "lulled into false sense of security" by lower inflation, says Pill

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

Credit Agricole CIB Research discusses GBP outlook for the coming week.

"Looking ahead into next week, the UK data calendar is relatively light with only the latest BoE lending data and the final PMIs for February on the docket. Also, next week, the Spring Statement could attract some attention as well, even though we doubt that Chancellor Rachel Reeves will make any major policy announcements. This is because the statement could showcase the improving fiscal outlook in terms of growing fiscal headroom and lower borrowing needs," CACIB notes.

"Turning to the FX market impact, we think that the GBP is starting to look oversold, especially given that a lot of BoE-related negatives are already in its price. Easing fiscal concerns and a cautious economic recovery in the UK could attract more foreign investors into the gilt and equity markets, in a boost to the GBP," CACIB adds.

ANZ Research discusses EUR and GBP outlook for the coming week. 

"The week ahead is data-heavy for the EA, with inflation and unemployment prints due. Consensus expects steady headline inflation and a marginal uptick in the unemployment rate, but this stagnation narrative is not fully captured in OIS pricing...

Markets currently are not pricing any ECB rate cut in 2026, suggesting room for expectations to adjust if next week’s data surprise on the downside. Overall, we think EUR/USD lacks a decisive catalyst. We expect EUR to remain data-dependent and neutral in the week ahead," ANZ notes.

"Chancellor Reeves will deliver the Spring Statement next week. Recent figures for public sector net borrowing have shown a notable improvement compared to the previous year...

Budget Responsibility presents a upside surprise in its borrowing schedule, the Spring Statement is likely to be a non-event for the GBP. We are neutral on the GBP this week," ANZ adds.

• AUD/USD dipped to 0.7095 overnight, buyers emerged, 0.7132 then traded

• Pair pulled back, NY opened just below 0.7110, pair close to flat early NY

• Rally off low aided by softer US yields , copper & silver gains

• Pull back from the high aided by USD/CNH rally & AUD/JPY's drop

• A daily doji candle formed, suggests indecision but other bullish signals remain

• Pair consolidating recent gains while above the 10- & 21-DMA is a bull sign

• Rising monthly RSI, hold above January's monthly add to bullish signals

• US Jan. PPI, Feb. Chicago PMI are data risks in NY's morning
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• AUD/USD has traded a 37 pip range thus far Friday; 0.7095-0.7132

• The peak of that range is three pips shy of Thursday's two-week high

• Thursday's low was 0.7067 (as risk appetite soured, to detriment of AUD)

• China hobbles yuan (AUD is often used as a liquid proxy for CNY)

• Fed chair nominee Warsh's path to out-of-the-gate rate cuts could be narrowing

• U.S. jobs report due next week; February NFP expected at 60k (Reuters poll)

•
AUDUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

February 27 (Reuters) - FX traders can use a simple option to capture a bigger technical EUR/USD rebound in coming sessions.

EUR/USD recently failed to sustain a break below the 1.1768 Fibo, a 61.8% retrace of the 1.1572 to 1.2084 January (EBS) rise, which is potentially a bear trap: set when a market breaks below a technical level but subsequently reverses and is usually a bullish sign.

There is a good chance EUR/USD could climb in the days ahead to break above the 1.1834 February 23 high, a break above which would unmask the 1.1928 February 10 peak.

Those who want to capture a short-term EUR/USD rise could buy a one-week 1.1810 EUR call option at a cost of 38 pips, priced with spot at 1.1808. Profit potential is unlimited if spot is above the 1.1848 break-even point at the March 6 expiry. Losses are limited to the 38 pips premium paid.
Fenics Pricing Grid


Daily Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

• Cable has traded a 47 pip range since the London open; 1.3462-1.3509 (low first)

• Range base is 15.5 pips above Thursday low (which the 200DMA helped define)

• Labour finished third in Manchester by-election, which was won by the Greens

• Result increases the pressure on PM Starmer ahead of UK local elections in May

• UK finance minister Reeves to deliver spring statement on Tuesday (March 3)

• Fed chair nominee Warsh's path to out-of-the-gate rate cuts could be narrowing

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

• EUR/USD stalled after a brief rise above 1.2000 (1.2084 high)

• The reverse from the high has been modest - a bullish sign

• Pair holding at an elevated level even though many betting on a rise

• A close over the 200-MMA at 1.1939 would be a first

• EUR/USD may rise to 1.28 if move over 1.2016 - 38.2% 2008-2022 drop - sustained

• Targets drawn off 2025 low 2026 peak and subsequent low 1.2492, 1.2732, 1.2955

• *

EURUSD targets


EURUSD


(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• At $26 billion the net euro long is second largest on record

• Bullish wagers of such extent usually lead to reversal, but little sign of one

• EUR/USD dipped to 1.1766 after reaching highest since June 2021 at 1.2084

• The modest dip suggest that despite their size spec bets are not too large

• The low at 1.1766 is another step up in series of major lows since Feb 2025

• Feb 2025 1.0125, Mar 1.0733, May 1.1065, Aug 1.1392, Nov 1.1469, Jan 1.1572

• Currencies gripped by trends that are the surprising result of a trade war

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• GBP/USD steady in Asia after closing 0.6% lower Thu on UK political concerns

• Result of Manchester vote awaited Fri, polls say outcome too close to call

• Will be PM Starmer's first electoral test since Mandelson appointment uproar

• Risk aversion fuelled by rising AI angst also weighs on GBP

• Wall Street futures extend previous day's drop; S&P E-Mini -0.35%

• British Finance Minister Rachel Reeves delivers an annual budget update Tue

• New economic forecasts will be announced; focus will be on inflation outlook

• Support 1.3440-50, 1.3400-10, resistance 1.3520-25, 1.3550, 1.3575-80

• Thursday range 1.34465-1.3475; Asia range 1.3477-1.34925
GBP:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• AUD/USD +6.5% ytd, underwritten by rising OCR hike expectations

• Pair should eventually test & break above Jan 2023 0.7158 high

• DXY's repeated rejections of 55-DMA flags potential downswing

• Geopolitical tensions ease amid claims of progress from U.S./Iran talks

• AU Jan housing sector credit +0.6% m/m, remaining strong pre-Feb RBA hike

• RBA officials Hunter, Bullock & Hauser all speaking next week

• Range Asia 0.7095-0.7114, support 0.6900 0.6660 0.6420, resistance 0.7158
AUD Weekly 52-WMA


AUD Daily 200-DMA & DXY Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.1% Fri in quiet trading, risk sentiment showing green shoots

• AU Jan housing sector credit +0.6% m/m, remaining strong pre-Feb RBA hike

• Positive noises from U.S./Iran talks soothing geopolitical fears pre-weekend

• DXY's continued failures to break above 55-DMA a bearish signal

• 0.7158 resistance zone remains the target for AUD over coming sessions

• RBA officials Hunter, Bullock & Hauser all speaking next week

• Range Asia 0.70966-0.71085, support 0.6900 0.6660 0.6420, resistance 0.7158
AUD Hourly Bollinger Study & DXY Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• USD/JPY still holding below daily Ichimoku cloud, could go either way

• Daily cloud 156.53-157.44 today, descending now, to 155.72-77 March 3

• Break up above cloud possible unless yen gains some more

• Debate still on in Tokyo as to whether BOJ has nerve to hike

• PM Takaichi clearly in favour of BOJ stand pat, Gov Ueda, others not so

• USD/JPY currently in 155.67-156.22 hourly Ichimoku cloud, 100-HMA 155.59

• Support too at 155.66 flat daily kijun, 155.17 100-DMA, 154.76 tenkan

• Month-end Japanese importer demand eyed at Tokyo fix, exporters on rallies

• Offshore player month-end re-balancing also eyed

• In options, massive $1.8 bln in expiries today at 155.00 strike

• Also 155.50-65 $657 mln, 155.95-156.00 $459 mln, 156.50-157.00 $2 bln

• JGB-US Treasury rate differentials back to narrowing trend, 10s @188 bps

• Related comments , , ,

• Also , on Fed , US economy

• US markets , , ,

• On BOJ , for more click on [FXBUZ]

USD/JPY:


JGB-US Treasury interest rate differential:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

ING Research discusses JPY near-term outlook.

"In the short term, JPY’s outlook remains clouded. Improved risk sentiment is encouraging JPY short-building even more, and we expect a slightly faster-than-expected deceleration in tomorrow’s Tokyo’s core CPI to 1.6%, which could keep markets tempted to speculate on the dovish side," ING notes.

"The 157.7, 9 February high may well be tested over the coming days – and a break higher would put FX intervention risk back on the radar. Still, there’s a good chance the Japanese authorities won’t pull the trigger until 160," ING adds.

• NZD/USD -0.4% from Thur 0.6012 high, series of lower highs forming

• 0.5930 support zone an inflection point, break below will trigger sell off

• RBNZ's less hawkish tone limiting enthusiasm for short-term rallies

• DXY fails to break above 97.95 55-DMA again, looks technically bearish

• Reports of progress in U.S./Iran talks, UST yields softer across the curve

• U.S. initial jobless claims +212k (poll 215k), Jan PPI data due Fri

• RBNZ publishes background material on 2025 review of key capital settings

• Range NZ 0.5959-865, support 0.5930 0.5730 0.5580, resistance 0.6120
NZD Daily 55-DMA


DXY Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD settles mid-range late Thur; USD index looks set for fresh leg down

• DXY fails to break above 97.95 55-DMA for fifth time in six trading days

• UST yields slightly lower as U.S./Iran concerns prompt safe haven demand

• U.S. initial jobless claims +212k (poll 215k), Jan PPI data due Fri

• AUD oscillating, needs renewed momentum to extend beyond 0.7158 resistance

• RBA officials Hunter, Bullock & Hauser all speaking next week

• Overnight range 0.7067-0.7135, support 0.6900 0.6660, resistance 0.7158
AUD Daily 200-DMA & DXY Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

The dollar rose broadly on Thursday, supported by a risk-off tone stemming from Iran nuclear talks, weakness in tech shares after Nvidia’s earnings, and concerns over a rift between Anthropic and the Pentagon. Additionally, the U.S. Treasury warned it may cut MBaer Merchant Bank AG off from the U.S. financial system, saying the Swiss lender had aided illicit actors. WTI crude relinquished gains in the New York afernoon after Oman’s foreign minister reported significant progress in U.S.–Iran talks. A modest bump in weekly jobless claim suggested the U.S. labor market remained in a low-hire, low-fire state. The ECB trimmed its dollar holdings early last year, reducing the U.S. currency's share in its FX reserves as part of routine portfolio rebalancing.

The dollar index continues to consolidate as its 55-day moving average near 98.00.

EUR/USD slid toward its 55-DMA at 1.1773 and 61.8% Fib of the 1.1572–1.2084 rise, with declining RSIs and a daily inverted hammer reinforcing the bearish tone.

AUD/USD slipped as metals and equities weakened and the dollar strengthened, leaving a daily inverted hammer with RSI divergence, while monthly signals still suggest only limited pullbacks. GBP/USD tumbled toward its 200-day moving average at 1.3447, with the pound underperforming other G10 peers as risk tone softened, as U.K. political uncertainty amid a local vote and a less-hawkish Bank of England path weighed.

USD/JPY held firm before Tokyo CPI on Friday as haven demand and month-end flows lifted the dollar, holding it above 155.60 support and a bullish 21-/100-DMA crossover near 155.

Treasury yields were down about 2 basis points across the curve leaving the 2s-10s curve unchanged at +57.9bp.

The S&P 500 fell 0.82%.

Gold was marginally higher while silver fell 2.2% and copper dropped 0.66%

Heading toward the close: EUR/USD -0.23%, USD/JPY -0.01%, GBP/USD -0.65%, AUD/USD -0.36%, DXY +0.22%, EUR/JPY -0.18%, GBP/JPY -0.67%, AUD/JPY -0.36%.(Editing by Burton Frierson Reporting by Robert Fullem)

ANZ Research discusses BoJ policy trajectory.

"There is much to consider in Japan’s economic outlook. However, in coming months we expect domestic economic conditions will be consistent with gradual disinflation through 2026. Headline Consumer Price Index inflation was 1.5% y/y in January, and we forecast it will average 1.7% this year. We expect core inflation (2.4% y/y) will come down gradually, closer to 2.0%. We are of the view that the BoJ needs to proceed cautiously with respect to further tightening," ANZ notes.

"We forecast only one more 25bp rate rise this year, as Japan gradually moves away from the zero lower bound, taking the policy rate to 1.0%," ANZ adds.

• NY opened near 0.7110 after 0.7135 traded overnight, pair lifted early

• 0.7122 traded but bulls ran out of gas, sellers then emerged as risk soured

• Gold , silver , copper & stocks traded lower

• Those helped rally US$ as did USD/CNH nearing flat after making a 35-month low

• AUD/USD hit 0.7067 then neared 0.7075 late, was down -0.68% in NY's afternoon

• Daily inverted hammer formed, daily RSI diverged on the 10-session high hit earlier

• Monthly techs lean bullish so corrective pull backs may be limited in scope
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Goldman Sachs discusses the latest IMM report on Gold positioning.

"Per the latest Commitment of Traders, Gold Managed Money positioning started to recover from the long-term impairment suffered in late January/early February. Specifically, Gold Managed Money net purchased +$1.4bn from February 10th - 17th, ending a 3 week streak of selling which totaled -$22.9bn. Buying seemingly persisted in the subsequent 5 sessions," GS notes,

"Elevated stagflation risks, following the US Administration's response to the Supreme Court ruling on IEEPA and a potential Middle East conflict, provided support. That said, bulls are trading very tactically; some profit taking ensued on the eve of US-Iran negotiations," GS adds.