Markets absorbed hawkish signals from Federal Reserve meeting minutes on Wednesday, with Treasury yields rising and the dollar strengthening broadly as policymakers acknowledged the possibility of rate hikes if inflation remains elevated, while RBNZ dovish commentary and softer UK inflation data pressured their respective currencies.
Check out the forex news and economic updates you may have missed in the latest trading session!
Forex News Headlines & Data:
- New Zealand PPI Input for December 31, 2025: -0.5% q/q (0.5% q/q forecast; 0.2% q/q previous)
- Japan Balance of Trade for January 2026: -1,152.7B (-2,500.0B forecast; 105.7B previous)
- Japan Reuters Tankan Index for February 2026: 13.0 (9.0 forecast; 7.0 previous)
- Australia Wage Price Index for December 31, 2025: 0.8% q/q (0.8% q/q forecast; 0.8% q/q previous); 3.4% y/y (3.4% y/y forecast; 3.4% y/y previous)
- New Zealand RBNZ Interest Rate Decision for February 18, 2026: 2.25% (2.25% forecast; 2.25% previous)
- U.K. CPI Growth Rate for January 2026: 3.0% y/y (3.0% y/y forecast; 3.4% y/y previous); -0.5% m/m (-0.4% m/m forecast; 0.4% m/m previous)
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U.S. MBA Mortgage Applications for February 13, 2026: 2.8% (-0.3% previous)
- U.S. MBA 30-Year Mortgage Rate for February 13, 2026: 6.17% (6.21% previous)
- U.S. Building Permits Prel for December 2025: 4.3% m/m (-3.7% m/m forecast; -1.6% m/m previous)
- U.S. Durable Goods Orders for December 2025: -1.4% m/m (-3.4% m/m forecast; 5.3% m/m previous)
- U.S. NY Fed Services Activity Index for February 2026: -25.7 (-16.1 previous)
- U.S. Manufacturing Production for January 2026: 0.6% m/m (0.7% m/m forecast; 0.2% m/m previous); 2.4% y/y (1.8% y/y forecast; 2.0% y/y previous)
- FOMC Minutes: The minutes showed the Fed holding rates at 3.5%–3.75% while becoming more divided over whether the next move should be a cut, an extended pause, or even a hike, reinforcing a strongly data‑dependent stance.
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Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay – Chart Faster With TradingView
Wednesday’s session reflected shifting monetary policy expectations as Federal Reserve meeting minutes revealed growing division among officials about the future path of interest rates, with several policymakers acknowledging that rate hikes could be appropriate if inflation remains elevated.
WTI crude oil surged 4.94% to close around $65.39 per barrel, marking the session’s strongest performance among major assets. The rally appeared to correlate with escalating geopolitical tensions in the Middle East, with traders weighing reports about potential U.S. military intervention in Iran. The sharp move higher likely reflected heightened risk premium being priced into energy markets amid supply disruption concerns.
Gold advanced 2.18% to settle near $4,983 per ounce, extending its recent strength. The precious metal’s rally likely reflected safe-haven demand tied to Middle East tensions and ongoing uncertainty about the Federal Reserve’s policy trajectory. With inflation concerns persisting according to the FOMC minutes, gold’s appeal as an inflation hedge may have been a driver as well.
The S&P 500 posted modest gains of 0.48%, closing around 6,887 after initially rallying nearly 1% during morning trade. The index pared most of its advance following the 2:00 pm ET release of Fed minutes, which showed several officials suggesting rate hikes could be appropriate if inflation stays above target. The pullback possibly reflected traders recalibrating expectations for monetary easing, though solid U.S. industrial production data and better-than-expected durable goods orders potentially provided underlying support for equities.
Bitcoin declined 2.05% to trade near $66,250, underperforming traditional risk assets. The cryptocurrency showed pronounced weakness during the U.S. afternoon session following the Fed minutes release, possibly reflecting concerns that a less accommodative monetary policy environment could weigh on speculative assets. The digital asset’s correlation with risk sentiment appeared evident as it diverged sharply from equity market gains.
Treasury yields rose 0.81% to around 4.09% on the 10-year note, with the advance accelerating following the Fed minutes release. The move higher likely correlated with the hawkish tone from several Fed officials who indicated openness to rate hikes if inflation remains persistent. The bond market reaction suggested traders are pricing in a shallower path of rate cuts than previously anticipated, with the minutes reinforcing that policy will remain data-dependent rather than following a preset easing trajectory.
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FX Market Behavior: U.S. Dollar vs. Majors
Overlay of USD vs. Majors – Chart Faster With TradingView
The U.S. dollar traded with increasing strength throughout Wednesday’s session, closing as the best performing major currency after rallying sharply following hawkish Federal Reserve meeting minutes that acknowledged the possibility of rate hikes if inflation remains elevated.
During the Asian session, the dollar saw light volatility and mostly sideways trading with a net bullish lean. The New Zealand dollar was the big mover of the Asia morning session following the Reserve Bank of New Zealand’s monetary policy statement. The RBNZ held its Official Cash Rate at 2.25% as expected but maintained dovish forward guidance, pressuring NZD lower. The central bank’s emphasis on monitoring economic conditions appeared to reinforce expectations that further rate cuts remain on the table if growth disappoints.
The London session brought choppy, mixed dollar trading with an arguably slightly net bullish lean against major currencies. European markets appeared to trade cautiously ahead of the U.S. session’s key data releases and Fed minutes. UK inflation data released showed headline CPI cooling to 3.0% year-over-year from 3.4% previously, coming in line with expectations and providing modest support to rate cut expectations for the Bank of England. Sterling showed relative resilience despite the softer inflation print, possibly reflecting positioning adjustments or technical factors rather than fundamental reassessment. The euro traded in a narrow range with no significant eurozone catalysts to drive directional momentum.
After the U.S. session opened, the dollar rallied and maintained strength against major currencies through the rest of the session. The greenback’s advance appeared to correlate initially with solid U.S. economic data, including manufacturing production rising 0.6% month-over-month in January (beating the 0.2% prior reading) and durable goods orders showing resilience despite a headline decline. However, the dollar’s most decisive move came at 2:00 pm ET following the release of FOMC meeting minutes. The minutes revealed that several Fed officials indicated upward adjustments to interest rates could be appropriate if inflation remains at above-target levels, marking a notably hawkish shift in tone.
The minutes also showed that a vast majority of participants judged downside risks to employment had moderated while the risk of more persistent inflation remained. This two-sided risk assessment appeared to support the dollar as traders reduced expectations for near-term rate cuts. The minutes further noted that several participants cautioned against easing policy in the context of elevated inflation, suggesting policymaker commitment to the 2% inflation target remains firm despite prior rate reductions.
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Upcoming Potential Catalysts on the Economic Calendar
- Japan Machinery Orders for December 2025 at 11:50 pm GMT
- Australia Employment Update for January 2026 at 12:30 am GMT
- Swiss Balance of Trade for January 2026 at 7:00 am GMT
- Swiss Industrial Production for December 31, 2025 at 7:30 am GMT
- ECB Guindos Speech at 11:30 am GMT
- U.S. Fed Bostic Speech at 1:20 pm GMT
- Canada Balance of Trade for December 2025 at 1:30 pm GMT
- Canada New Housing Price Index for January 2026 at 1:30 pm GMT
- U.S. Initial Jobless Claims for February 14, 2026 at 1:30 pm GMT
- U.S. Goods Trade Balance Adv for December 2025 at 1:30 pm GMT
- U.S. Balance of Trade for December 2025 at 1:30 pm GMT
- Philadelphia Fed Manufacturing Index for February 2026 at 1:30 pm GMT
- U.S. Fed Bowman Speech at 1:30 pm GMT
- U.S. Fed Kashkari Speech at 2:00 pm GMT
- Euro area Consumer Confidence Flash for February 2026 at 3:00 pm GMT
- U.S. Pending Home Sales for January 2026 at 3:00 pm GMT
- U.S. EIA Crude Oil Stocks Change for February 13, 2026 at 5:00 pm GMT
- U.S. Fed Balance Sheet for February 18, 2026 at 9:30 pm GMT
Thursday’s calendar features multiple Fed speakers—including Bostic, Bowman, and Kashkari—who could provide further clarity on how policymakers are balancing inflation concerns against labor market conditions following Wednesday’s hawkish meeting minutes.
Australia’s employment report overnight will offer fresh insight into labor market resilience in the Asia-Pacific region, with particular focus on whether hiring momentum has sustained through the start of 2026.
U.S. initial jobless claims and the Philadelphia Fed Manufacturing Index could spark volatility if they show meaningful divergence from recent trends, particularly given the Fed’s heightened focus on labor market stability.
Markets remain sensitive to any commentary suggesting the Fed’s next move could be a rate hike rather than a cut, especially after several officials indicated such adjustments might be appropriate if inflation stays elevated.
Stay frosty out there, forex friends!
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