TOKYO — The US dollar held on to recent gains in thin trading Tuesday as investors waited for Federal Reserve meeting minutes and a U.S. GDP report that could reshape bets on when interest-rate cuts begin. Lunar New Year closures across much of Asia, plus Monday’s U.S. Presidents Day holiday, kept markets cautious ahead of the week’s key releases, Feb. 17, 2026.
The U.S. Dollar Index (DXY) ticked up to about 97.12 after a modest rise in the previous session. The euro traded near $1.184, sterling was around $1.3607 and the yen firmed to roughly 153.04 per dollar after sliding a day earlier.
Dollar index: 97.12
EUR/USD: $1.184
USD/JPY: 153.04
GBP/USD: $1.3607
AUD/USD: $0.706
US dollar focus: Fed minutes and GDP could reset rate-cut bets
Traders are looking first to the Fed’s account of its Jan. 27-28 meeting, due Wednesday. The Federal Reserve’s February calendar shows the minutes scheduled for 2 p.m. EST, a release that can shift expectations about how soon the central bank is willing to start cutting rates.
Two days later, attention turns to growth. The BEA release schedule lists the advance estimate of fourth-quarter and full-year 2025 gross domestic product for Friday morning, a data point that can quickly change the outlook for U.S. yields and the US dollar.
Rate markets continue to lean toward the Fed’s first cut arriving in early summer, helped by softer-than-expected U.S. inflation data for January. The CME FedWatch Tool shows traders assigning a high chance of a June move, while money markets are pricing about 59 basis points of easing for the rest of 2026.
Kristina Clifton, senior currency strategist at Commonwealth Bank of Australia, said she expects relative growth to matter as much as the next data print. “We judge that the most important driver of the dollar through 2026 will be the narrative of U.S. exceptionalism,” Clifton said.
US dollar vs major peers: yen steadies as Japan growth disappoints
In Asia, the yen trimmed losses after weaker Japanese growth data stoked expectations for more fiscal support. Some investors also see a gradual shift as overseas funds continue to target Japanese equities and the Bank of Japan keeps rate hikes on the table, a mix that could cap extended US dollar strength against the yen.
Bart Wakabayashi, Tokyo branch manager at State Street, said longer-term investors have been dialing back positions that favor a rising dollar-yen. “Real money investors have been reducing their overweight in dollar-yen, so buying the yen and selling the dollar,” he said.
In Europe, the euro and pound were little changed as traders looked ahead to inflation reports due later in the week from Britain, Canada and Japan. Dealers said low liquidity could magnify swings until major markets fully reopen.
Aussie and kiwi: policy patience keeps the US dollar as the benchmark
The Australian dollar slipped to about $0.706 after Reserve Bank of Australia minutes showed policymakers were in no rush to raise rates. New Zealand’s kiwi held around $0.6029 ahead of a Reserve Bank of New Zealand decision on Wednesday that is widely expected to leave rates unchanged, keeping the US dollar as the key reference for regional risk appetite.
Why the US dollar story keeps repeating
Today’s wait-and-see mood echoes past pivots in global rate expectations. In September 2022, the dollar index hit a 20-year high near 111.63 as the Fed signaled aggressive tightening to fight inflation.
A year later, September 2023 brought another bout of dollar strength after the Fed held rates steady but reinforced a hawkish bias, reminding investors that “higher for longer” can matter as much as the level itself.
By April 2024, markets had sharply pared back expected easing—with rate futures implying about 38 basis points of cuts for the year—showing how quickly pricing shifts can feed through to the US dollar.
What to watch next for the US dollar
The next test comes from Wednesday’s Fed minutes and Friday’s GDP release, followed by global business-activity surveys and fresh inflation data that could refine the “June cut” debate.
If the minutes or GDP point to a softer economy, the US dollar could give back recent gains as investors pull forward rate cuts. A firmer growth signal, by contrast, could reinforce the view that the United States is still outperforming and keep the US dollar supported into late February.
