TOKYO — The U.S. dollar held near recent highs in thin holiday trading as investors waited for key Fed minutes and a delayed U.S. gross domestic product report that could reset bets on interest-rate cuts, Feb. 17, 2026.
Markets are increasingly leaning toward the first move as soon as June after softer inflation data, but traders say the Fed minutes should clarify how close policymakers were to resuming easing after holding rates steady in January.
In early Asia trade, the dollar index was little changed around 97.12. The euro hovered near $1.184 while the yen strengthened to about 153 per dollar after a recent bout of volatility.
The next catalyst is Wednesday’s release of the Fed minutes from the Jan. 27-28 meeting, scheduled by the central bank for 2 p.m. Eastern. Investors will scan the record for how much support there was for rate cuts, how officials weighed cooling inflation against still-firm growth, and whether the committee discussed what would need to change before easing resumes.
At that meeting, the Federal Reserve maintained the target range for the federal funds rate at 3.5% to 3.75%, even as two officials dissented in favor of a quarter-point cut. Those details matter because the Fed minutes typically reveal the contours of debate that do not fit into a short post-meeting statement.
For now, many traders see the Fed minutes as a reality check: a document that can either validate the market’s June timing or push expectations later if policymakers sound more cautious than futures pricing implies.
U.S. GDP report could test the “soft landing” narrative
Two days after the Fed minutes, markets will get fresh evidence on whether the U.S. economy is cooling just enough to allow cuts without stoking inflation fears. The Bureau of Economic Analysis lists its next GDP release for Feb. 20, after fourth-quarter data were delayed amid last autumn’s government shutdown and reporting backlogs.
The last official reading still shows a strong handoff into late 2025: BEA’s updated estimate put third-quarter growth at a 4.4% annual rate. A meaningful downshift in fourth-quarter growth could strengthen the case for June cuts, while another upside surprise could keep the dollar supported by the prospect of “higher for longer” policy settings.
BEA’s GDP page, including the next release timing, is available here on the agency’s site.
Why the resilient dollar is holding up despite June cut bets
Even with easing expectations rebuilding, the greenback has stayed resilient because U.S. yields remain high relative to many peers and because investors continue to treat U.S. growth as comparatively sturdy. Commonwealth Bank of Australia strategist Kristina Clifton said the bank remains “quite positive on the U.S. economy,” and expects a June cut, even as it sees a possible follow-up in July.
Rate-cut probabilities can shift quickly after each data point, which is why traders often cross-check pricing in federal funds futures with tools such as the CME FedWatch tool ahead of the Fed minutes and the GDP print.
The setup creates a narrow path for the dollar: dovish Fed minutes that point to broad support for cuts could soften the currency, but any signal that officials remain uneasy about inflation persistence could keep the dollar firm into Friday’s GDP test.
From “Brand USA” worries to the rate-cut cycle: continuity over time
The current tug-of-war between “U.S. exceptionalism” and imminent easing is the latest chapter in a longer dollar story. In May 2025, one Reuters analysis argued the dollar was “set for more weakness” as confidence in “Brand USA” cooled and fiscal and trade concerns mounted (older context here).
By September 2025, the Fed delivered its first cut of the cycle, but with caveats that left investors unsure how quickly easing would proceed (Reuters recap).
And minutes released late in 2025 highlighted how divided policymakers were even as cuts continued—an important precedent for how much market-moving detail can surface in the Fed minutes investors will read this week (Dec. 30 minutes coverage).
What to watch next
Wednesday: The Fed minutes for clues on consensus, dissent, and what conditions officials want to see before cutting again.
Friday: The first official look at fourth-quarter GDP and whether growth is cooling fast enough to validate June easing bets.
For traders, the message is straightforward: if the Fed minutes read more dovish than expected and GDP shows a clear slowdown, June cut pricing may harden—and the dollar could finally give back some of its recent resilience. If not, the greenback’s grip may hold a while longer.
