Last week, financial markets moved cautiously as several US economic data showed that inflationary pressures were moderating.
This situation caused expectations of Federal Reserve action to become more balanced, with investors starting to reduce their assumptions that the central bank will remain aggressive in interest rate policy for an extended period.
As a result, the USD currency lost some momentum, while global markets now enter a new week with full focus on a series of economic data that could determine the next direction.
TUESDAY (February 17, 2026)
Canadian Consumer Price Index (CPI) (9.30 PM) – This data is expected to be stable at 2.5%, indicating that inflationary pressures in the country are under control and do not put new pressure on the Bank of Canada to change its monetary policy stance.
Stable readings often bring a picture of a balanced economy, where the central bank can continue to assess the situation without having to act drastically.
From a currency perspective, the expected data could keep the CAD in a range, while the USD could be only moderately affected. However, if there is a higher inflation shock, the market could start to anticipate a more hawkish tone that could potentially strengthen the Canadian currency.
WEDNESDAY (February 18, 2026)
New Zealand Interest Rate Decision (9 AM) – The Reserve Bank of New Zealand is expected to keep its policy rate unchanged at 2.25%, as at its previous meeting. It is seen as waiting to see how the global economy develops before making its next big decision.
In such a situation, the central bank’s statement is more important than the rate figure itself. If the tone of the statement shows optimism about growth, the NZD could find support.
Conversely, a cautious approach or concerns about the economy could weigh on the currency and allow for a relative strengthening of the USD.
UK Consumer Price Index (CPI) (3 PM) – European markets are also focusing on the UK CPI data, which is forecast to fall from 3.4% to 3.0%.
The decline in inflation suggests that price pressures are easing, opening the way for the Bank of England to consider a looser policy tone in the future.
If the figure does indeed fall as expected, the pound sterling could lose some support as investors see the risk of persistently high interest rates receding. In the context of global currency markets, a weaker pound typically gives the USD a slight advantage.
US Durable Goods Orders (9.30pm) – The main focus as it is expected to fall 1.8% compared to a significant 5.3% increase in the previous data.
The decline is not necessarily negative overall as it could be seen as a normalisation after the previous big surge. However, the market will still assess whether the US manufacturing sector is losing momentum.
If the data shows a sharper slowdown than expected, the USD could come under pressure as it suggests economic growth is starting to moderate.
Otherwise, a better-than-expected figure could help restore confidence in the strength of the US economy.
THURSDAY (February 19, 2026)
FOMC Minutes (3 AM) – A closely watched document as they reveal the internal discussions of Federal Open Market Committee policymakers.
The market will be looking for clues as to how members view the inflation trajectory, the level of concern about economic growth and the likely path of interest rates going forward.
A hawkish tone could support the USD as it signals that the central bank remains cautious about inflation risks. Conversely, if the minutes show a more dovish bias, the USD could come under selling pressure.
Unemployment Claims (9:30 PM) – This jobs report is expected to rise slightly to 229,000 from 227,000 previously.
Small changes like this usually reflect a still-firm labor market, but investors will still be watching for any unexpected spikes that could signal an economic slowdown.
If claims rise higher than forecast, the USD could weaken as it suggests the labor sector is starting to lose strength.
However, a lower figure adds to confidence that the US economy is still strong and capable of supporting the USD.
FRIDAY (February 20, 2026)
US GDP (9.30 PM) – The US GDP is forecast to come in at 2.8%, down from 4.4% previously, indicating that economic growth is still positive but the momentum is moderating.
A reading that meets expectations may not cause a major reaction as it has been factored in, but if it is lower than forecast, it could put pressure on the USD due to concerns that the US economy is cooling faster than expected.
Conversely, a stronger reading would support the narrative that the economy is still resilient.
Core PCE Price Index (9.30 PM) – This report is forecast to show a slight increase to 0.3% from 0.2% previously. This is the Federal Reserve’s preferred inflation indicator, so the reaction is usually more sensitive than other data.
A small increase that meets or exceeds expectations could support the USD as it suggests that inflation has not yet fully subsided.
If the reading is lower, the market may see an opportunity for looser monetary policy, thus putting pressure on the currency.
US Manufacturing & Services PMI (10.45 PM) – These data are expected to be stable at 52.1 and 52.8 respectively, still above the 50 level that indicates economic expansion. Stable data indicates that economic activity continues to move without major surprises.
If the figures are in line with forecasts, the market reaction may be moderate as it indicates the economy is growing at a controlled pace. However, any significant deviation, either stronger or weaker, could change sentiment towards the USD towards the close of the trading week.
Overall, this week has brought the main theme of the battle between growth signals and inflation.
After the USD weakened slightly last week on softer economic data, the market is now waiting to see whether this new series of data can restore confidence in the US economy or instead reinforce the slowdown narrative.
For investors, this week will provide a picture of one data point in isolation, but how the overall figure shapes the big picture of the USD currency’s direction in the near term.
