The euro rose in European trading on Monday against a basket of global currencies, extending its recovery for a second consecutive day from a four-week low against the US dollar. The move was supported by continued buying from lower levels, in addition to weakness in the US currency following Trump’s tariff actions.

As inflationary pressures ease on policymakers at the European Central Bank, expectations for at least one European interest rate cut this year have strengthened. To reassess those expectations, traders are awaiting an important speech later today by European Central Bank President Christine Lagarde.

Price Overview

The euro exchange rate today: the euro rose against the dollar by around 0.5% to $1.1835, up from Friday’s closing level of $1.1778, while recording an intraday low of $1.1788.

The euro ended Friday’s session up by less than 0.1% against the dollar, marking its first gain in three days, after recording a four-week low of $1.1742 in the previous session.

Beyond buying from lower levels, the euro also rebounded following better-than-expected data on the performance of Europe’s key sectors in February.

The euro lost 0.75% against the dollar last week, marking its second weekly decline within the past three weeks, due to rising expectations for at least one European interest rate cut this year.

US dollar

The dollar index fell by 0.45% on Monday, extending losses for a second consecutive session and moving away from a one-month high, reflecting continued weakness in the US currency against a basket of major and secondary currencies.

In addition to profit-taking, the dollar declined following a historic US Supreme Court ruling on Friday that found Trump’s sweeping tariffs exceeded his authority.

Trump responded by strongly criticizing the court and raising tariffs from 10% to 15% on imports starting Tuesday, while insisting on maintaining high-tariff agreements with trading partners.

Sim Moh Siong, currency strategist at OCBC in Singapore, said the decision weakens the dollar as it could benefit economic growth outside the United States.

Siong added that the long-term foreign exchange implications are less clear, as lower US revenues could weigh on fiscal conditions and the dollar, while limiting Trump’s authority may be viewed positively by reducing one source of trade policy volatility.

European interest rates

Data released recently in Europe showed a slowdown in headline inflation levels in December, indicating easing inflationary pressures on the European Central Bank.

Following those figures, money markets increased pricing for a 25 basis point rate cut by the European Central Bank at its March meeting from 10% to 25%.

Traders also adjusted expectations from keeping rates unchanged throughout the year to anticipating at least one 25 basis point cut.

To reassess these expectations, traders are awaiting a speech later today by European Central Bank President Christine Lagarde at the National Association for Business Economics annual policy conference in Washington.

The Wall Street Journal reported that Christine Lagarde intends to complete her term at the European Central Bank.

The Japanese yen rose broadly in Asian trading on Monday at the start of the week against a basket of major and secondary currencies, beginning to recover from a nearly two-week low against the US dollar amid renewed demand for safe-haven assets. The move comes as investors react to concerns surrounding Trump’s tariff actions following the historic US Supreme Court ruling.

With inflationary pressures easing on policymakers at the Bank of Japan, expectations for a Japanese interest rate hike have declined until at least September. Investors are now awaiting further key economic data from Japan to reassess those expectations.

Price Overview

The Japanese yen exchange rate today: the dollar fell against the yen by around 0.7% to 153.99 yen, down from Friday’s closing level of 155.03 yen, while recording an intraday high of 154.95 yen.

The yen ended Friday’s session down by less than 0.1% against the dollar, marking its third consecutive daily loss, and recorded a nearly two-week low of 155.64 yen, pressured by easing inflationary pressures in Japan.

The Japanese yen lost 1.6% against the US dollar last week, marking its second weekly decline within the past three weeks and its largest weekly loss since July 2025, due to reduced expectations for Japanese rate hikes, in addition to concerns linked to the expansionary economic policies of Japanese Prime Minister Sanae Takaichi.

Trump’s tariff moves

The US Supreme Court issued a historic ruling on Friday, February 20, 2026, invalidating the broad tariffs previously imposed by the Trump administration, ruling that the use of the International Emergency Economic Powers Act (IEEPA) to impose those tariffs exceeded the legal authority granted to the president.

In a swift response, Trump announced on Saturday, February 21, 2026, that global tariffs would be raised from 10% to 15%, set to take effect starting tomorrow, Tuesday, February 24, 2026.

This time, Trump relied on Section 122 of the Trade Act of 1974, a law that allows the president to impose temporary tariffs for up to 150 days to address balance-of-payments deficits without immediate congressional approval.

The Supreme Court ruling also raised major legal questions about whether companies that paid billions of dollars under the previous “unlawful” system could receive compensation, a process that may take years to resolve in court.

Japanese interest rates

Data released in Tokyo on Friday showed that Japan’s core inflation rate slowed in January to its lowest level in two years, easing inflationary pressures on the Bank of Japan.

Following that data, pricing for a quarter-point rate hike by the Bank of Japan at its March meeting fell from 10% to 3%.

Pricing for a quarter-point hike at the April meeting also declined from 50% to 30%.

According to the latest Reuters poll, the Bank of Japan may raise interest rates to 1% in September.

Investors are awaiting further data on inflation, unemployment, and wage levels in Japan to reprice those expectations.

Most cryptocurrencies rose during trading on Friday as markets welcomed the US Supreme Court’s decision to overturn Trump’s tariffs.

A majority of US Supreme Court justices ruled today that the tariffs imposed by Donald Trump under the International Emergency Economic Powers Act were unlawful, stating that the president does not have the authority to impose tariffs on imports.

In response, Trump announced that he intends to implement a global 10% tariff in addition to the tariffs not canceled by the court ruling, and said he would consider reimposing alternative tariffs based on other legislation.

Markets also absorbed US fourth-quarter gross domestic product data, which showed growth of 1.4%, significantly below expectations of 2.5%, according to a Dow Jones survey.

Aditya Bhave, Chief US Economist at Bank of America, said that growth would have reached around 2.5% to 2.6% if not for the impact of the government shutdown.

Inflation data also raised concerns, as the core personal consumption expenditures price index — the Federal Reserve’s preferred inflation measure — recorded an annual rate of 3% in December, in line with expectations but still well above the central bank’s 2% target.

Regarding Federal Reserve policy, markets continue to largely expect the first interest rate cut this year to come in June, according to the CME Group FedWatch tool.

Ethereum

In trading, Ethereum rose by 1.2% on CoinMarketCap as of 21:45 GMT to $1,971.8, although the cryptocurrency posted weekly losses of 3.9%.

The Canadian dollar posted a weekly decline against its US counterpart on Friday as investors assessed mixed domestic retail sales data and a landmark US Supreme Court ruling on tariffs.

The Canadian dollar, known as the “loonie,” fell by 0.1% to 1.3687 Canadian dollars per US dollar, or 73.06 US cents, after trading within a range of 1.3671 to 1.3710 during the session. Over the week, the currency declined by 0.5% as domestic data showed easing inflation pressures, while the US dollar recorded broad-based gains.

The US Supreme Court ruled to cancel the sweeping tariffs imposed by President Donald Trump, which had been enacted under the International Emergency Economic Powers Act (IEEPA), a law intended for use during national emergencies.

Claire Fan and Nathan Janzen, economists at RBC, said in a research note that the ruling is likely to have less impact on Canadian trade than on most other countries.

The economists explained that most Canadian exports were already exempt from tariffs imposed under the IEEPA, while product-specific tariff measures — which represented a larger issue for the Canadian economy — were unaffected by the court’s decision.

Canadian exports of lumber, steel, and aluminum, along with auto components that do not comply with the United States-Mexico-Canada Agreement, continue to face elevated US tariffs.

Data showed that Canadian retail sales fell by 0.4% month-on-month in December, led by weaker sales at motor vehicle and parts dealers. However, a preliminary estimate indicated a 1.5% rebound in January.

Shelly Kaushik, Chief Economist at BMO Capital Markets, said in a note that consumer spending remains resilient despite ongoing economic uncertainty.

Oil prices, one of Canada’s key exports, were little changed, slipping 0.1% to $66.39 per barrel as markets expected no US military action against Iran before next week.

Canadian government bond yields edged slightly lower across maturities. The yield on the 10-year bond fell by 1.4 basis points to 3.220%, after earlier touching its lowest level since December 1 at 3.199%.