Forecasting the upcoming week: US inflation on the cards amid tariff uncertainty

The Greenback suffered another lacklustre week, dropping to levels not seen since early December 2024. The deeper retracement came amid persistent ambiguity over tariffs, which overshadowed the Federal Reserve’s latest reassurances about maintaining a cautious monetary policy stance.

The US Dollar Index (DXY) remained on the back foot for the third week in a row, this time revisiting two-month lows in the 106.30 region, always amid the absence of clarity from Trump’s trade policy. The Chicago Fed National Activity Index and the Dallas Fed Manufacturing Index will kick off the calendar on February 24, followed by the FHFA’s House Price Index, the Conference Board’s Consumer Confidence, and the API’s weekly report on US crude oil inventories, all expected on February 25. The weekly MBA’s Mortgage Applications are due on February 26, seconded by New Home Sales and the EIA’s weekly report on US crude oil stockpiles. The usual weekly Initial Jobless Claims wil be published on February 27 along with Durable Goods Orders, and another estimate of Q4 GDP Growth Rate. The PCE takes centre stage on February 28, followed by Personal Income/Spending, Wholesale Inventories and the Chicago PMI.

EUR/USD ended the week with modest losses following an erratic price action despite reclaiming the area beyond the 1.0500 hurdle. The IFO Business Climate in Germany and the EMU’s final Inflation Rate are due on February 24. The final Q4 GDP Growth Rate in Germany and the ECB’s Negotiated Wage Growth are expected on February 25. Germany’s GfK Consumer Confidence is due on February 26, while the final EMU’s Consumer Confidence and Economic Sentiment will be released on February 27 along with the ECB’s M3 Money Supply. Closing the week in Europe, the main focus will be on the publication of the preliminary Inflation Rate in Germany, followed by Retail Sales, and the Unemployment Rate.

Despite Friday’s hiccup, GBP/USD managed to extend its bullish bias for the third straight week, largely surpassing the key 1.2600 the figure. The CBI Distributive Trade is expected on February 25, while the Nationwide Housing Prices are due on February 28.

USD/JPY resumed its multi-week decline and traded at shouting distance from the 149.00 neighbourhood, always amid steady expetation of further BoJ tightening. The final Coincident Index and Leading Economic Index will be published on February 26. On February 28 will come the Tokyo inflation figures, along with Industrial Production, Retail Sales, Housing Starts, Construction Orders, and the weekly Foreign Bond Investment readings.

Auspicious data releases in Australia in combination with the hawkish rate cut by the RBA sent AUD/USD beyond the 0.6400 barrier for the first time since December, securing at the same time the third consecutive week of gains. The RBA’s Monthly CPI Indicator and Construction Work Done are due on February 26, while the quarterly Private Capital Expenditure will be published on February 27. Housing Credit prints and Private Sector Credit figures are due on February 28.

Anticipating Economic Perspectives: Voices on the Horizon

• The BoE’s Dhingra will speak on February 24.
• The Fed’s Logan and Barkin speak on February 25 along with the BoE’s Pill, and the ECB’s Nagel.
• The Fed’s Bostic and the BoE’s Dhingra are due to speak on February 26.
• The Fed’s Hammack and Harker will speak on February 27.
• The BoE’s Ramsden speaks on February 28.

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The MNB will meet on February 25.
• The BoT meets on February 26.
• The Norges Bank will decide on rates on February 27.