Forex Today: USD strengthens on FOMC minutes; ECB succession in focus
Here’s what to know for Thursday, February 19
A potential early departure for European Central Bank (ECB) President Christine Lagarde could open the door for French President Emmanuel Macron to influence who succeeds her before his term ends in May next year, per a Financial Times report. An ECB spokesperson stated on Wednesday that Lagarde has not decided whether she will complete her full term, keeping the path to leadership uncertain.
In the United States, the Federal Reserve released the minutes from its January Federal Open Market Committee meeting. Several policymakers signaled that additional rate cuts could be appropriate if inflation slows in line with expectations. However, the document also stressed that policy is not one-sided. Some participants suggested that future communications should acknowledge the possibility of rate hikes if inflation remains above target, underscoring a flexible reaction function. While officials remain focused on guiding inflation toward the 2% objective, they also recognize uncertainty about the pace and timing.
The US Dollar Index (DXY) hovered around the 97.70 region after the FOMC minutes, marking a one-week high in response to the report.
US Dollar Price Today
The table below illustrates the USD’s percentage moves versus major peers today. The dollar rose strongest against the New Zealand Dollar.
- USD: EUR 0.56% higher, GBP 1.01% higher, JPY 1.01% higher, CAD 0.44% higher, AUD 0.59% higher, NZD 1.37% higher, CHF 0.37% higher
- EUR: USD −0.56%, GBP −0.10%, JPY −0.42%, CAD 0.12%, AUD −0.03%, NZD −0.81%, CHF 0.19%
- GBP: USD −0.46%, EUR 0.10%, JPY −0.52%, CAD 0.02%, AUD 0.13%, NZD 0.91%, CHF −0.09%
- JPY: USD −1.01%, EUR −0.42%, GBP −0.52%, CAD −0.54%, AUD −0.38%, NZD 0.41%, CHF −0.61%
- CAD: USD −0.44%, EUR 0.12%, GBP 0.02%, JPY 0.54%, AUD 0.15%, NZD 0.94%, CHF −0.07%
- AUD: USD −0.59%, EUR −0.03%, GBP −0.13%, JPY 0.38%, CAD −0.15%, NZD 0.78%, CHF −0.22%
- NZD: USD −1.37%, EUR −0.81%, GBP −0.91%, JPY −0.41%, CAD −0.94%, AUD −0.78%, CHF −0.99%
- CHF: USD −0.37%, EUR 0.19%, GBP 0.09%, JPY 0.61%, CAD 0.07%, AUD 0.22%, NZD 0.99%
The heat map visualizes how major currencies move against each other, with the left column showing the base and the top row the quote. For example, selecting USD as the base and following across to JPY shows the USD/JPY change in that box.
Key pairs and levels:
- EUR/USD hovers near 1.1790 after the dollar strengthened on the FOMC minutes and Lagarde headlines.
- GBP/USD sits around 1.3500, slipping toward a one-month low as softer UK inflation and employment data fuel bets on a Bank of England rate cut.
- USD/JPY jumped to a one-week high around 154.80 as supports for a firmer dollar grew. Note: Japanese Prime Minister Sanae Takaichi declined to comment on market moves, including FX.
- AUD/USD near 0.7040, with the AUD weakening against a stronger USD.
- USD/CAD around 1.3700, a one-week high after softer-than-expected Canadian CPI reinforced expectations for BoC rate cuts.
- Gold is around $4,980 per ounce in the U.S. session, showing muted movement after Tuesday’s rebound.
What’s on the docket next:
Thursday, February 19:
- Australia January Employment Change
- Australia January Unemployment Rate
- Lagarde speech at the ECB
Friday, February 20:
- UK January Retail Sales
- Germany February flash HCOB Composite PMIs
- Eurozone PMIs
- UK February flash S&P Global PMIs
- US December Core Personal Consumption Expenditures
- February US S&P Global PMIs
Gold: Quick context
Gold has long served as a store of value and a medium of exchange. Beyond its shine for jewelry, it’s viewed as a safe-haven asset—useful during instability—and a hedge against inflation and currency depreciation since it isn’t tied to any single issuer or government.
Central banks hold substantial gold reserves as a trust signal of solvency, often diversifying reserves to stabilize currencies. The World Gold Council notes that central banks added about 1,136 tonnes of gold worth roughly $70 billion in 2022—the largest yearly increase on record. Emerging economies such as China, India, and Turkey are expanding their gold holdings rapidly.
Gold’s price generally moves inversely to the US dollar and to U.S. Treasuries, and inversely with risk assets. A stronger dollar tends to cap gold gains, whereas a weaker dollar can lift prices. Geopolitical tensions or recession fears tend to boost gold as a safe haven. Conversely, rising real yields can pressure gold, while falling rates can bolster it. Practically, the price of XAU/USD is largely driven by USD actions and broader market risk sentiment.
