Financial & Forex Market Recap: Feb. 25, 2026

Risk sentiment turned cautiously optimistic on Wednesday as Nvidia’s robust earnings outlook reignited confidence in AI infrastructure spending, while geopolitical tensions and central bank policy dynamics kept currency markets volatile.

Check out the forex news and economic updates you may have missed in the latest trading session!

Forex News Headlines & Data:

• U.S. API Crude Oil Stock Change for February 20, 2026: 11.4M (-0.61M previous)
• Australia CPI Growth Rate for January 2026: 0.4% m/m (0.2% m/m forecast; 1.0% m/m previous); 3.8% y/y (3.7% y/y forecast; 3.8% y/y previous)
• Trump’s State of the Union cast the U.S. as “back” and “strong,” touting economic and border policies and a hard line on immigration and crime while largely dismissing ongoing economic concerns
• Germany GDP Growth Rate Final for December 31, 2025: 0.3% q/q (0.3% q/q forecast; 0.0% q/q previous)
• Germany GfK Consumer Confidence for March 2026: -24.7 (-23.8 forecast; -24.1 previous)
• France Consumer Confidence for February 2026: 91.0 (90.0 forecast; 90.0 previous)
• Swiss Economic Sentiment Index for February 2026: 9.8 (-1.0 forecast; -4.7 previous)
• Euro area CPI Growth Rate Final for January 2026: -0.6% m/m (-0.5% m/m forecast; 0.2% m/m previous); 1.7% y/y (1.7% y/y forecast; 1.9% y/y previous)
• U.S. MBA Mortgage Applications for February 20, 2026: 0.4% (2.8% previous)
  • U.S. MBA 30-Year Mortgage Rate for February 20, 2026: 6.09% (6.17% previous)
• Canada Wholesale Sales Prel for January 2026: -0.6% m/m (0.3% m/m forecast; 2.0% m/m previous)
• U.S. EIA Crude Oil Stocks Change for February 20, 2026: 15.99M (-9.01M previous)

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Broad Market Price Action:

Wednesday’s session delivered a tale of two market narratives as technology stocks rallied on Nvidia’s strong outlook while traditional safe havens reflected ongoing uncertainty about geopolitical tensions and central bank policy trajectories.

The S&P 500 climbed approximately 1.01% to settle near 6,956, snapping a two-day losing streak. The index traded mostly sideways through the Asian sessions before finding support after the London open and rallying steadily through the afternoon US session. The sustained rally appeared to reflect a broader reassessment of AI disruption concerns that had weighed on markets earlier in the week, with investors possibly viewing Monday and Tuesday’s selloff as overdone. After the close of regular trading, Nvidia reported fiscal first-quarter sales guidance of approximately $78 billion, beating the average estimate of $72.8 billion, which helped solidify the positive sentiment shift and lifted the stock about 1.5% in extended hours trading.

Bitcoin extended its recovery, surging approximately 7.63% to trade near $68,921 by the late afternoon. The cryptocurrency strengthened steadily throughout the Asian session, consolidated during London hours, then accelerated higher during the U.S. session with pronounced momentum building after the equity market open. While there were no direct crypto-specific catalysts to point to, the rally appeared to correlate with improving risk sentiment ahead of Nvidia’s results and possible reassessment of AI disruption concerns.

Gold edged modestly higher, gaining approximately 0.37% to close around $5,166. The precious metal popped higher at the Asia open and then traded in a range through the rest of the Asian session, then pulled back during the London morning session. It saw continued choppiness during the U.S. session, rising then pulling back into the close. The pullback during U.S. hours appeared to correlate with strengthening equities reducing near-term safe-haven demand, though gold’s resilience above $5,150 suggested underlying support remains intact amid ongoing geopolitical tensions involving U.S.-Iran relations and Trump administration tariff policies.

WTI crude oil declined approximately 0.77% to settle near $65.40 per barrel. Oil prices traded choppy throughout the session, initially rising during Asian hours possibly on lingering supply concerns from Trump’s diplomatic approach to Iran, before reversing lower during London hours and extending losses into the U.S. afternoon. The decline appeared to outweigh the substantial build in EIA crude inventories showing a 15.99 million barrel increase versus expectations for a decline, suggesting that demand concerns or profit-taking may have dominated price action. Trump’s reiteration during the State of the Union that diplomacy remains preferred with Iran likely reinforced the view that immediate supply disruption risks have diminished.

U.S. Treasury yields advanced approximately 0.62% to trade around 4.10% on the 10-year note. Yields climbed steadily through the Asian session, consolidated during London hours around 4.08%, then dipped and bounced during U.S. trade. The move higher appeared to correlate with improving risk sentiment in equities and possibly reflected traders positioning for persistent inflation pressures following St. Louis Fed President Musalem’s comments that inflation remains nearly a full percentage point above target. The yield advance occurred despite ongoing uncertainty about the reliability of recent employment data distorted by October’s government shutdown, suggesting bond markets may be pricing in a more cautious Federal Reserve easing path than previously anticipated.

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FX Market Behavior: U.S. Dollar vs. Majors

The U.S. dollar experienced a volatile session on Wednesday, ultimately posting losses against most major currencies as traders navigated mixed economic signals from Australia’s hotter-than-expected inflation data, European growth concerns, and shifting Federal Reserve rate cut expectations.

During the Asian session, the dollar fell slowly against the major currencies on net. The most significant catalyst came from Australia, where January CPI data printed on the firm side of expectations. Headline inflation held at 3.8% y/y versus 3.7% forecast, while the trimmed mean rose 0.3% m/m, pushing the annual pace to 3.4% from 3.3%. The weighted median also advanced 0.3% m/m, maintaining 3.6% y/y. The data reinforced the case for potential further Reserve Bank of Australia tightening, lifting the Australian dollar notably despite RBA officials’ repeated emphasis on waiting for the April 29 quarterly CPI before making policy moves. The dollar’s broad weakness during Asian hours appeared to reflect repositioning following Tuesday’s mixed employment data that most analysts expect the Fed to look through due to government shutdown distortions. Japan’s Nikkei 225 climbed to fresh record highs as AI-disruption fears eased and the yen softened, though the government’s nomination of new Bank of Japan board members generated limited immediate currency reaction as their policy leanings remained unclear.

The London session brought a reversal in dollar fortunes as the greenback rebounded against the major currencies, though it pulled back slightly heading into the U.S. session. European economic data came in mixed, with Germany’s final Q4 GDP confirmed at 0.3% q/q growth but consumer confidence for March disappointing at -24.7 versus -23.8 expected. The euro area’s final January inflation reading of 1.7% y/y matched preliminary estimates, while core inflation held at 2.2% y/y. The data painted a picture of modest eurozone growth with inflation cooling toward the ECB’s target, yet the dollar’s rebound during London hours suggested that relative growth concerns in Europe may have provided underlying support for the greenback.

The U.S. session saw the dollar under pressure. After an opening bounce, the dollar resumed its downward trajectory against the major currencies on net. St. Louis Fed President Musalem’s comments around midday provided hawkish undertones, noting inflation remains nearly a full percentage point above the Fed’s 2% target and emphasizing the need to finish the job on price stability. However, his base case calling for economy to grow at or above 2% supported by accommodative financial conditions failed to arrest the dollar’s decline, possibly reflecting market positioning that Fed rate cuts remain likely later in 2026 despite near-term inflation persistence.

At the Wednesday close, the U.S. dollar was one of the worst performing major currencies on the day, only seeing a gain against the Japanese yen. The yen’s underperformance appeared to correlate with Tuesday’s developments of Prime Minister Sanae Takaichi’s opposition to further Bank of Japan rate hikes, which weighed on the currency despite former BOJ Governor Kuroda’s calls for tighter policy given Japan’s changed economic context. The dollar’s losses against the euro, pound, and commodity currencies suggested that traders were positioning for a scenario where the Federal Reserve maintains a cautious approach to policy despite inflation remaining elevated, while other central banks navigate their own complex inflation and growth dynamics heading into year-end.

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Upcoming Potential Catalysts on the Economic Calendar

• New Zealand ANZ Business Confidence for February 2026 at 12:00 am GMT
• Australia Private Capital Expenditure for December 31, 2025 at 12:30 am GMT
• Bank of Japan Takada Speech at 1:30 am GMT
• Japan Leading Indicators Index for December 2025 at 5:00 am GMT
• Swiss Non Farm Payrolls for December 31, 2025 at 7:30 am GMT
• Euro area ECB President Lagarde Speech at 8:30 am GMT
• Euro area Monetary Developments for January 2026 at 9:00 am GMT
• Euro area Consumer Confidence for February 2026 at 10:00 am GMT
  • Euro area Economic Sentiment for February 2026 at 10:00 am GMT
• Canada Average Weekly Earnings for December 2025 at 1:30 pm GMT
• U.S. Initial Jobless Claims for February 21, 2026 at 1:30 pm GMT
• U.S. Fed Bowman Speech at 3:00 pm GMT
• U.S. EIA Natural Gas Stocks Change for February 20, 2026 at 3:30 pm GMT
• U.S. Kansas Fed Manufacturing Index for February 2026 at 4:00 pm GMT

Thursday’s calendar features ECB President Lagarde’s speech at 8:30 am GMT, which could provide crucial insight into the central bank’s policy trajectory following Wednesday’s final January inflation reading confirming the slowdown to 1.7% y/y. Euro area consumer confidence and economic sentiment readings at 10:00 am GMT will offer additional perspective on whether the modest growth confirmed by Germany’s Q4 GDP can be sustained into Q1 2026.

During the U.S. session, weekly initial jobless claims at 1:30 pm GMT will be closely scrutinized for any signs of labor market deterioration beyond the distortions caused by October’s government shutdown, though data quality concerns may limit immediate market reactions. Fed Governor Bowman’s speech at 3:00 pm GMT could spark volatility if she provides clarity on how policymakers are weighing persistent inflation against softening employment data when considering the timing of potential rate cuts later in 2026.

Markets remain sensitive to any fresh commentary on the balance between inflation pressures and growth concerns, particularly following Wednesday’s session where improving risk sentiment in equities contrasted with ongoing currency market volatility driven by diverging central bank policy trajectories.

Stay frosty out there, forex friends!

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