February 17, 2026
United States:
Dollar Rises As Currency Traders Bet on Fewer Fed Cuts
The dollar edged higher for a second day as currency traders bet the Federal Reserve won’t be able to deliver three rate cuts in 2026.
Hedge funds dialed back bearish bets against the greenback on Tuesday as strategists questioned whether economic data — especially inflation — will unlock interest-rate cuts on the scale expected by investors. Money markets are pricing about 64 basis points of rate cuts by the end of the year.
Europe:
UK Unemployment at 5-Year High Paves Way for More BOE Rate Cuts
UK unemployment reached its highest since the pandemic and wage growth eased as the labor market continued to weaken, prompting traders to increase bets on further interest-rate cuts from the Bank of England.
The jobless rate climbed to 5.2% in the final quarter of last year, the Office for National Statistics said Tuesday, the highest since early 2021 and above the 5.1% economists were forecasting.
Asia:
Japan Bonds Extend Rally as Market Passes Latest Auction Test
Japan’s government bonds extended a week-long rally after a smooth auction of five-year notes buttressed positive sentiment amid receding concerns over rate hikes, fiscal risks and inflation.
So-called super long debt led the advance, driving yields on 20- to 40-year debt down at least 10 basis points, while rates on shorter-dated tenors also declined.
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