Forex Today: Markets remain choppy ahead of mid-tier data releases
25.02.2025, 07:15

Forex Today: Markets remain choppy ahead of mid-tier data releases

Here is what you need to know on Tuesday, February 25:

Major currency pairs failed to make a decisive move in either direction on Monday amid a lack of high-tier data releases. On Tuesday, the European Central Bank (ECB) will publish Negotiated Wage Rates data for the fourth quarter. In the second half of the day, the US economic calendar will feature regional manufacturing surveys and the Conference Board's Consumer Confidence Index data for February. Additionally, several Federal Reserve policymakers will be delivering speeches and US President Donald Trump will be signing more executive orders.

US Dollar PRICE Last 7 days

The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the weakest against the Japanese Yen.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   0.13% -0.00% -1.18% 0.55% 0.21% 0.13% -0.43%
EUR -0.13%   -0.14% -1.30% 0.43% 0.08% -0.00% -0.55%
GBP 0.00% 0.14%   -1.17% 0.56% 0.21% 0.13% -0.42%
JPY 1.18% 1.30% 1.17%   1.74% 1.39% 1.30% 0.75%
CAD -0.55% -0.43% -0.56% -1.74%   -0.34% -0.42% -0.97%
AUD -0.21% -0.08% -0.21% -1.39% 0.34%   -0.08% -0.64%
NZD -0.13% 0.00% -0.13% -1.30% 0.42% 0.08%   -0.55%
CHF 0.43% 0.55% 0.42% -0.75% 0.97% 0.64% 0.55%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

The US Dollar (USD) Index started the week under modest selling pressure and touched its lowest level since early December below 106.20. The index benefited from the cautious market mood in the second half of the day on Monday and erased its daily losses. Early Tuesday, the index fluctuates in a tight range above 106.50. Trump said on Monday that tariffs on imports from Canada and Mexico will go forward on schedule. 

EUR/USD opened on a bullish note on Monday and climbed above 1.0500 as markets reacted to German election results. After retracing its daily climb to close the day flat, the pair seems to have entered a consolidation phase above 1.0450 in the European morning on Tuesday. Isabel Schnabel, Member of the European Central Bank's Executive Board, will deliver a keynote speech at Bank of England's Annual Research Conference.

GBP/USD lost its traction after rising toward 1.2700 early Monday and ended the day marginally lower. The pair holds steady above 1.2600 in the early European session on Tuesday.

USD/JPY posted small gains on Monday and continued to edge higher in the Asian session on Tuesday. The pair, however, lost its traction after rising above 150.00 and retreated toward 149.60 by the European morning. The data from Japan showed earlier in the day that the Corporate Service Price Index rose by 3.1% on a yearly basis in January, up slightly from the 3% increase recorded in December.

Gold capitalized on falling US Treasury bond yields and touched a new all-time high above $2,955 on Monday. XAU/USD corrects lower early Tuesday and was last seen trading below $2,940.

US Dollar FAQs

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

 

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