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A collection of good and bad news affecting the foreign exchange market
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Hello everyone, today XM Forex will bring you "[XM Forex Official Website]: A collection of good and bad news affecting the foreign exchange market". Hope this helps you! The original content is as follows:
On February 11, 2026, the foreign exchange market entered the core node of the super data week. The global foreign exchange market focused on the U.S. non-farm payrolls data in January in the evening. The long and short sentiments were fiercely contested amidst the divergence of the Federal Reserve policy, the differentiation of European and American economic data, and geopolitical disturbances. The following is the core good news, bad news and key logic affecting the foreign exchange market today to assist trading decisions.
1. The U.S. dollar: long and short, cautious fluctuations before non-farm payrolls
(1) Negative factors for the U.S. dollar
Weak economic data, rising expectations of interest rate cuts
U.S. retail sales in December were 0% month-on-month, and core retail sales were -0.1% month-on-month, both significantly lower than expected, indicating a slowdown in consumer momentum. At the same time, the U.S. employment cost index in the fourth quarter was only 0.7%, the lowest since 2021, wage pressure has eased, and market expectations for the Federal Reserve's first interest rate cut in June continue to rise. CME interest rate futures show that the probability of an interest rate cut exceeds 50%**, and the attractiveness of U.S. dollar assets has declined.
The dovish stance of Federal Reserve officials is fermenting
Although the 2026 FOMC voting xmaccount.committee and Cleveland Fed Chairman Hammaker emphasized that "there is no urgent need to cut interest rates this year" and is worried about stubborn inflation, the market is more concerned about the overall dovish tendency of the Federal Reserve. xmaccount.combined with the weakening of US economic data, the confidence of US dollar bulls has been frustrated.
U.S. bond yields fell
The U.S. 10-year Treasury bond yield hit a new low in the past month. The spread between U.S. bonds and non-U.S. bonds narrowed. International capital flowed out of U.S. dollar assets and toward high-yield non-U.S. currencies, directly suppressing the U.S. dollar index.
(2) Factors that are positive for the US dollar
Risk aversion is supported by phases
The situation in the Middle East is tense, the EU has increased sanctions on Russia,Factors such as political uncertainty in the UK have triggered risk aversion in global markets. As a traditional safe-haven currency, the US dollar has received periodic buying support.
There are variables in the expectation of non-agricultural data
Although ADP employment data is only 22,000, the market is still divided on the non-agricultural data. Some institutions predict that the number of employment may exceed expectations. If the data is strong, it will alleviate concerns about interest rate cuts and boost the dollar.
2. Euro: Stable policy, stronger shocks
(1) Positive factors for the euro
Strong policy stability of the European Central Bank
ECB Governing Council member Nagel and President Lagarde have recently made it clear that core inflation is close to the target and the current interest rate level is appropriate, dispelling market concerns about early interest rate cuts. The certainty of the euro zone's monetary policy has increased, attracting capital inflows into euro assets.
A weak U.S. dollar provides upside space
The U.S. dollar is weakening due to expectations of an interest rate cut by the Federal Reserve, and the differences between European and American monetary policies are widening. The EUR/USD has received continued support, and the exchange rate has stabilized above the 1.1900 mark.
(2) Negative factors for the euro
Weak economic recovery in the Eurozone
The manufacturing PMI of the Eurozone in January was still below the boom and bust line, and the economic growth momentum was insufficient, limiting the upward trajectory of the euro.
Geopolitical drag
The European Union is advancing the 20th round of sanctions against Russia and xmaccount.comprehensively bans shipping services for Russian crude oil exports, which may trigger Russian counterattacks, drag down the euro zone economy and trade, and indirectly put pressure on the euro.
3. The Japanese yen: multiple positives and a strong rebound
(1) Positive factors for the Japanese yen
Double support from Japanese politics and policies
Japan’s Liberal Democratic Party won a big election, and Prime Minister Sanae Takaichi’s fiscal plan stabilized market expectations; Japanese foreign exchange officials frequently expressed concern about exchange rate fluctuations, and the market’s expectations for Japan’s intervention in the foreign exchange market increased, pushing the Japanese yen to strengthen significantly.
An influx of safe-haven funds
Global geopolitical risks have risen, coupled with the weakening of the US dollar. As a safe-haven currency, the Japanese yen has attracted a large amount of capital allocation. The US dollar/yen has fallen sharply for two consecutive days, falling below the key support of 156.00.
(2) Negative factors for the yen
Japan’s economic fundamentals are still weak, inflationary pressure has eased, and the Bank of Japan’s stance on maintaining ultra-loose monetary policy has not changed, limiting the space for appreciation of the yen in the long term.
4. Sterling: Political disturbance, weak shock
(1) Negative factors for the pound
British Prime Minister Starmer faced calls from his party to resign, political uncertainty increased, the market worried about the stability of British policies, funds withdrew from sterling assets, and the pound/dollar came under pressure.
(2) Factors that are positive for the pound
The weakness of the US dollar provides bottom support for the pound. The British economic data has not significantly deteriorated, limiting the scope for the pound's correction.
5. RMB: Resonating internally and externally, continuing to strengthen
(1) Factors that are positive for the RMB
Strong internal fundamentals
China's economy is making steady progress, foreign trade is highly resilient, the trade surplus will hit a record high in 2025, and foreign exchange reserves are at a high level, providing solid support for the RMB.
The external U.S. dollar weakened
The U.S. dollar index fluctuated weakly, and non-U.S. currencies generally strengthened. The offshore RMB against the U.S. dollar rose above the 6.91 mark, hitting a new high in the past three years. The spread between onshore and offshore exchange rates narrowed, and cross-border funds continued to flow into RMB assets.
VI. Other Currencies and Key Events
(1) Positive for Emerging Market Currencies
Turkey’s inflation in January rose to 30.65% year-on-year. The market expects that the Turkish Central Bank will suspend interest rate cuts in March, and the lira will strengthen in the short term; the weakening of the US dollar and the easing of risk aversion, some high-yield emerging market currencies are favored by funds.
(2) Bad for xmaccount.commodity currencies
API crude oil inventories unexpectedly increased by 13.4 million barrels, putting oil prices under pressure, dragging down the trend of xmaccount.commodity currencies such as the Canadian dollar and the Australian dollar; concerns about the slowdown in global economic growth suppressed demand for xmaccount.commodities and further put pressure on xmaccount.commodity currencies.
(3) Today’s key focus
At 21:30 in the evening, the US January non-farm employment data will become the focus of the market. The strength of the data directly determines the pace of the Federal Reserve’s interest rate cuts and the short-term trend of the US dollar, which in turn dominates global currency market fluctuations. In addition, the progress of US-Iran negotiations and the speeches of European Central Bank officials also need to be closely followed.
VII. Trading summary
Today’s foreign exchange market has a fierce long-short game, the U.S. dollar index is at a key decision point, and the non-agricultural data will break the current shock pattern; the euro and the yen benefited from policy and risk aversion support, and the shocks were strong; the British pound was dragged down by political disturbances, and its performance was weak; the RMB resonated internally and externally, and continued to strengthen. In terms of operation, it is recommended to control positions before non-agriculture, focus on key support and resistance levels, and wait for the data to be released before taking advantage of the trend.
The above content is all about "[XM Foreign Exchange Official Website]: Collection of good and bad news affecting the foreign exchange market". It is carefully xmaccount.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
Due to the author's limited ability and time constraints, some contents in the article still need to be discussed and studied in depth. Therefore, in the future, the author will conduct extended research and discussion on the following issues:
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