Tomorrow at 09:00 (GMT+2), Germany will release fourth-quarter GDP data; however, forecasts do not suggest any revisions to previous estimates of 0.3% quarter-on-quarter and 0.6% year-on-year. This will be followed by February consumer climate figures from GfK Group, an indicator reflecting confidence in economic strength and serving as a leading signal for household spending. The negative trend is likely to persist, with the index expected to improve only slightly from –26.9 to –25.7 points.
For now, market participants are assessing German business activity reports from the IFO Institute, which provided support to the single European currency. The business climate index rose to 88.6 points, exceeding analysts’ expectations of 88.4 and reaching an August 2025 high, while the current assessment index climbed to 86.7 points (a July 2024 high) and the expectations index reached 90.5 points. By contrast, US data sent mixed signals, preventing the dollar from developing a sustainable trend. The revised fourth-quarter GDP estimate showed a sharp slowdown in economic growth to 1.4% year-on-year from 4.4% previously, which was half the preliminary estimate. At the same time, the personal consumption expenditures price index recorded an acceleration in the core indicator to 3.0% year-on-year, confirming persistent price pressures that are likely to influence the Federal Reserve’s decisions regarding potential rate cuts in the second half of the year.
GBP/USD
The pound is correcting after two days of predominantly bullish momentum and is testing the 1.3480 level for a downside breakout, as investors evaluate last week’s macroeconomic releases. In particular, attention was drawn to the continued deterioration in the UK labour market: unemployment rose to 5.2%, while employment has been declining for the seventeenth consecutive month, with the sharpest losses recorded in the services sector amid higher employer social contributions. Consumer inflation, by contrast, slowed to 3.0% in January, reaching a March 2025 low and reinforcing expectations of imminent monetary easing by the Bank of England. Market participants assign a 70.0% probability to a rate cut at the March 19 meeting, which has been a key source of pressure on the pound in recent days.
At the February meeting, the policy rate was kept unchanged at 3.75%, while the voting split attracted particular attention: five board members, including Governor Andrew Bailey, supported maintaining current conditions, while four voted for an immediate 25-basis-point cut. Bailey, who had previously advocated adjustments in December, shifted his stance, stating that monetary policy is not facing new major shocks despite global uncertainty. The regulator confirmed that the inflation trajectory will depend on the balance between persistent price pressures and weakening labour demand, noting that risks of CPI acceleration have become even less pronounced. Support for the US dollar came from December PCE data, which showed headline inflation accelerating from 2.8% to 3.0% year-on-year versus a preliminary estimate of 2.9%, and from 0.2% to 0.4% month-on-month versus expectations of 0.3%. Core PCE rose from 2.8% to 2.9% year-on-year and from 0.2% to 0.4% month-on-month.
Meanwhile, initial jobless claims fell from 229.0K to 206.0K, below forecasts of 223.0K, average claims edged down from 220.0K to 219.0K, and continuing claims rose to 1.869M versus expectations of 1.860M. These figures support the Fed’s wait-and-see stance on interest rates: the CME FedWatch Tool currently assigns a 95.5% probability that rates will remain in the 3.50–3.75% range at the March 18 meeting.
AUD/USD
The AUD/USD pair is extending the previous session’s corrective move, testing the 0.7060 level for a downside breakout, as traders await fresh catalysts. Tomorrow at 02:30 (GMT+2), the focus will be on Australian inflation data. Forecasts suggest that the annual pace of the weighted CPI, which measures changes in the cost of a basket of goods and services for households, will slow from 3.8% to 3.7% in January. However, this is unlikely to materially affect market expectations regarding potential rate hikes by the Reserve Bank of Australia (RBA).
At 10:40 (GMT+2), market participants will follow a speech by RBA Governor Michele Bullock, who may again point to persistent inflation risks amid cooling labour market conditions. At its February meeting, the central bank raised the policy rate to 3.85%, signalling that curbing price pressures remains a priority. According to estimates, inflation is not expected to return to the midpoint of the 1.0–2.0% target range until mid-2028. The RBA refrained from providing forward guidance, indicating that future borrowing costs will depend solely on incoming macroeconomic data. Markets currently price in slightly more than 37 basis points of tightening this year, which traders believe will be sufficient to support the Australian dollar’s yield.
Meanwhile, Australia’s economy is showing a controlled slowdown after a period of overheating, providing a favourable backdrop for maintaining a hawkish tone. Preliminary February business activity indices remain in expansionary territory, with manufacturing at around 52.0 points and services at 52.2 points. The trade surplus increased to AUD 3.373 billion at the end of 2025, while GDP grew by 0.4% quarter-on-quarter, accelerating to 2.1%, in line with official forecasts. The labour market also remains stable: full-time employment rose by a solid 50.5K in January, slightly below the previous month’s 56.8K (with December revised up from 54.8K), while part-time employment declined by 32.7K after a gain of 11.7K.
Total employment adjusted for seasonality increased by just 17.8K, significantly below December’s 68.5K, though in line with expectations for a sharp slowdown to 20.0K. The unemployment rate held steady at 4.1%, defying forecasts of a rise to 4.2%.
At the same time, US President Donald Trump’s decision to raise tariffs on imported goods to 15.0% is adding pressure to global trade stability and affecting Australia’s external economic strategy. Last week, the US Supreme Court ruled by a 6–3 majority that the initiation of tariffs was unlawful due to a lack of presidential authority, leading to the отмена of the base 10.0% levies. However, the subsequent increase to 15.0% highlights the continued protectionist trend in US policy. Australian Trade Minister Don Farrell has stated that authorities will comprehensively assess the impact of the new measures and consider possible diplomatic, legal, and economic responses, in coordination with the country’s embassy in Washington.
USD/JPY
The USD/JPY pair is testing the 155.29 level for a downside breakout. Market activity remains subdued on Tuesday morning in the absence of key macroeconomic drivers, prompting traders to focus on inflation data released last week. Nationwide CPI slowed from 2.1% to 1.5% year-on-year, below the Bank of Japan’s 2.0% target, while core inflation eased from 2.4% to 2.0%, a two-year low, potentially complicating plans for further rate hikes.
Japan’s economy showed modest improvement in the fourth quarter, with GDP rising by 0.1% quarter-on-quarter after a 0.7% contraction, narrowly avoiding a technical recession. However, the outcome fell well short of the Reuters consensus forecast of 0.4%. Annual GDP growth reached 0.2% versus preliminary estimates of 1.6%, following a –2.3% revision previously, while year-on-year growth slowed from 0.6% to 0.1%. The gradual recovery was driven primarily by stronger private consumption, partially offsetting weak exports and reduced government spending. Nevertheless, the GDP structure points to limited resilience in domestic demand and continued dependence on external conditions, creating a restrained fundamental backdrop for the yen.
In January, the Bank of Japan revised its growth forecast for the fiscal year ending in March from 0.7% to 0.9%, and for fiscal 2026 from 0.7% to 1.0%, reinforcing expectations of gradual stabilisation supported by improving inflation dynamics and wage growth amid government stimulus. Japanese authorities are also actively engaging with the US administration, the country’s second-largest trading partner, under a USD 550.0 billion investment commitment outlined in bilateral agreements.
Additionally, Japanese investors focused on an IMF report published on February 17, which offered three key recommendations. First, experts stressed the critical importance of preserving the Bank of Japan’s independence to maintain confidence in monetary policy and inflation expectations, a signal interpreted as indirect support for further tightening despite potential political pressure. Second, the IMF warned against fiscal expansion, noting that Japan’s public debt remains the highest among developed economies and that servicing costs could double by 2031 as existing liabilities are refinanced at higher rates. Third, the IMF opposed Prime Minister Sanae Takaichi’s proposal to suspend the 8.0% consumption tax on food for two years, calling it an “untargeted stimulus” that would reduce fiscal space without providing targeted support to vulnerable households.
XAU/USD
The XAU/USD pair is posting a moderate decline during the morning session on February 24, correcting after a four-day local rally that pushed prices to new highs. The metal is currently trading near the 5170.0 level as investors assess data released the previous day. In particular, US factory orders fell by 0.7% in December after a strong 2.7% increase a month earlier, while analysts had expected growth to slow to 1.1%.
Today at 17:00 (GMT+2), US investors and forex traders will focus on the Conference Board’s consumer confidence index, based on a survey of 5,000 US households assessing views on current and future economic conditions. The indicator is expected to continue rising, increasing from 84.5 to 87.6 points in February. Gold prices are also supported by geopolitical factors, as markets react to President Donald Trump’s warning of “very serious” consequences for Iran if no agreement is reached on the nuclear deal, alongside reports that the White House is considering limited military strikes on infrastructure to increase pressure on Tehran.
Although another round of talks is scheduled for February 26, the risk of escalation into a more acute phase continues to underpin demand for low-risk assets, particularly gold and silver, while also supporting the US dollar. This reflects a reallocation of capital toward safe-haven assets and a rising risk premium.
