Dollar stable as markets await PCE

17 February 2026

Today market analysis on behalf of Bas Kooijman is the CEO and Asset Manager of DHF Capital S.A

The dollar remained range-bound on Tuesday, reflecting a market caught amid mixed economic data. Caution could dominate the market ahead of Friday’s core PCE and updated GDP figures, both of which could recalibrate short-term expectations for US monetary policy.

In the meantime, the 2-year and 10-year yields were hovering near multi-month lows, reflecting an increasingly confident market that the Federal Reserve may deliver up to three consecutive interest rate cuts. Last week’s disinflation signals accelerated that repricing, capping upside potential for the greenback and yields.

Attention now turns to the FOMC minutes, preliminary Q4 GDP, and especially the PCE inflation gauge. Confirmation of sustained disinflation could pressure yields further, while any upside surprise may force a reassessment of the three-cut narrative.

The currency could also react to new data on the job market. The ADP data today and the jobless claims figures on Thursday could continue to mold expectations toward the next steps in monetary policy.

 

Zaid Barem / ymm