The US dollar held firm on Wednesday as geopolitical risks kept markets in a cautious mood, while investors awaited the minutes of the Federal Reserve meeting for signals about the future path of interest rate cuts.

The yen stabilized after data showed an improvement in Japanese manufacturing sentiment, alongside an announcement by US President Donald Trump regarding the first batch of major Japanese investments planned inside the United States.

The New Zealand dollar was the most active currency in Asian morning trading, as sellers moved into the market after the Reserve Bank of New Zealand kept interest rates unchanged and confirmed that monetary policy would need to remain in an accommodative range.

The bank’s stance reflects the continued fragility of the South Pacific nation’s economy.

Financial markets also continued to closely monitor geopolitical developments after Iran announced progress in nuclear talks with the United States in Geneva, while peace negotiations between Ukraine and Russia continued.

Samara Hammoud, currency strategist at Commonwealth Bank of Australia, said in a note:

“Risk appetite weakened due to concerns over renewed geopolitical tensions in the Middle East and volatility in US equity markets, which provided temporary support for the US dollar.”

She added: “However, reports that the United States and Iran made progress and reached a ‘general framework’ during nuclear negotiations in Switzerland helped calm those fears.”

Iran and the United States reached an understanding on the main “guiding principles” during a second round of indirect talks on the nuclear dispute on Tuesday, although a final agreement is not imminent, according to Iranian Foreign Minister Abbas Araqchi.

In Geneva as well, Ukrainian and Russian negotiators concluded the first day of US-mediated peace talks, which run for two days, as Trump presses Kyiv to move quickly toward a deal to end the four-year conflict.

With many Asian markets closed for Lunar New Year holidays, investors are waiting for the latest Federal Reserve meeting minutes and key US economic data for fresh trading catalysts.

The Federal Open Market Committee is scheduled to release the January meeting minutes later on Wednesday, while the Commerce Department will issue the preliminary estimate of US fourth-quarter GDP on Friday.

The dollar index, which measures the US currency against a basket of peers, was steady at 97.16 after two days of gains, while the euro slipped 0.06% to $1.1846.

The yen held at 153.23 per dollar, while the British pound fell 0.07% to $1.3558 after dropping 0.5% in the previous session.

Earlier data showed Japanese exports rose for a fifth straight month in January, while the Reuters Tankan survey offered some support for a slowing economy, with manufacturer confidence improving in February for the first time in three months.

The International Monetary Fund urged Japan to continue raising interest rates and avoid further fiscal easing. The Trump administration also announced three projects worth $36 billion to be financed by Japan, representing the first tranche of a roughly $550 billion project package approved by Tokyo to reduce US tariffs.

The Australian dollar fell 0.1% against its US counterpart to $0.7076, while the New Zealand dollar dropped 0.4% to $0.6016.

The Reserve Bank of New Zealand kept its key interest rate unchanged at 2.25% in the first meeting chaired by Governor Anna Brehmer, with policymakers stressing that the monetary stance must remain accommodative to support the economic recovery.

In cryptocurrency markets, Bitcoin fell 0.7% to $67,167.14, while Ethereum declined 1.15% to $1,976.18.

Gold prices rose in European trading on Wednesday for the first time in three sessions, as part of a rebound attempt from a two-week low, supported by buying activity at corrective levels. Those recovery attempts are being capped by the rise of the US dollar in the foreign exchange market.

With the probability of a US interest rate cut in March receding, global money markets are awaiting later today the release of the minutes of the Federal Reserve’s latest meeting, which are expected to contain strong clues about the path of US monetary policy this year.

Price Overview

• Gold prices today: Gold rose by 1.3% to $4,942.30, from an opening level of $4,878.63, and recorded a session low at $4,854.25.

• At Tuesday’s settlement, gold prices fell by about 2.3%, marking the second consecutive daily loss, and hit a two-week low at $4,841.43 per ounce, due to slower safe-haven demand amid positive political developments, in addition to upward pressure from the stronger US dollar.

US Dollar

The dollar index rose by 0.2% on Wednesday, extending gains for the third straight session, and trading near its highest level in about two weeks, reflecting continued strength in the US currency against a basket of major and minor currencies.

As is known, a stronger US dollar makes dollar-denominated gold bullion less attractive to buyers holding other currencies.

This advance comes as investors focus on buying the dollar as one of the best available opportunities in the FX market, especially with rising expectations that US interest rates will remain unchanged through the first half of this year.

US Interest Rates

• Chicago Federal Reserve President Austan Goolsbee said on Friday that interest rates may decline, but noted that inflation in the services sector remains elevated.

• Goolsbee said on Tuesday that the Federal Reserve could approve “several” additional rate cuts this year if inflation resumes its decline toward the central bank’s 2% target.

• According to the CME FedWatch tool, pricing for keeping US interest rates unchanged at the March meeting is steady at 90%, while the probability of a 25 basis point rate cut is priced at 10%.

• To reprice those probabilities, investors are awaiting later today the release of the minutes of the Federal Reserve’s latest monetary policy meeting.

Gold Performance Outlook

Senior analyst at Reliance Securities, Jigar Trivedi, said that overall gold prices are expected to range between $4,700 and $5,100 throughout the year.

SPDR Fund

Holdings of the SPDR Gold Trust, the largest gold-backed ETF in the world, fell on Tuesday by about 1.43 metric tons, bringing the total down to 1,075.61 metric tons, the lowest level since January 15.

The British pound declined in European trading on Wednesday against a basket of global currencies, extending its losses for the third straight day versus the US dollar, and heading toward testing a four-week low, as investors focused on buying the US currency as the most attractive available investment.

Gloomy data on the UK labor market increased the probability that the Bank of England will cut British interest rates next March. To reprice those expectations, investors are awaiting the release later today of the main UK inflation data for January.

Price overview

• British pound price today: The pound fell against the dollar by more than 0.1% to $1.3550, from the opening level at $1.3565, and recorded a session high at $1.3573.

• On Tuesday, the pound lost 0.45% against the dollar, marking its second consecutive daily loss, and hit a four-week low at $1.3496, due to UK labor market data.

US dollar

The dollar index rose by 0.1% on Wednesday, maintaining gains for the third straight session, and trading near its highest level in nearly two weeks, reflecting continued strength in the US currency against a basket of major and minor currencies.

This rise comes as investors focus on buying the dollar as one of the best available opportunities in the foreign exchange market, especially with growing expectations that the Federal Reserve will keep interest rates unchanged during the first half of this year.

To reprice those expectations, investors await later today the release of the minutes of the Federal Reserve’s latest meeting, which are expected to include strong clues about the future path of US monetary policy.

British interest rates

• Data released yesterday in the United Kingdom showed the unemployment rate rising to its highest level in about ten years in December, alongside a larger-than-expected increase in jobless claims in January.

• Following those data, pricing for a 25 basis point Bank of England rate cut at the March meeting rose from 60% to 85%.

UK inflation data

To reprice current expectations around British interest rates, investors are waiting later today for the release of the main UK inflation data for January, which are expected to have a strong impact on the Bank of England’s monetary policy path.

At 07:00 GMT, headline CPI is expected to rise by 3.0% year-on-year in January, down from 3.4% in December, while core CPI is expected to rise by 3.0% year-on-year from 3.2% in the previous reading.

Outlook for the British pound

We expect here at FX News Today that if UK inflation data come in below market expectations, the probability of a Bank of England rate cut in March will increase, which would lead to further negative pressure on British pound levels.

The New Zealand dollar declined broadly in Asian trading on Wednesday against a basket of major and minor currencies, hitting a two-week low versus its US counterpart, due to heavy selling after the results of the first Reserve Bank of New Zealand monetary policy meeting of 2026.

In line with expectations, the New Zealand central bank kept interest rates unchanged at their lowest level in three and a half years, and signaled the need to keep monetary policy accommodative to support the country’s economic recovery.

The Reserve Bank of New Zealand’s comments were less hawkish than markets had expected, which lifted the probability of a 25 basis point New Zealand rate cut at the upcoming April meeting.

Price overview

• New Zealand dollar price today: The New Zealand dollar fell against the US dollar by about 0.9% to 0.5996, the lowest level since February 6, from the day’s opening level at 0.6049, and recorded a session high at 0.6053.

• The New Zealand dollar ended Tuesday’s session up about 0.3% against the US dollar, marking its second gain in the past three days, within a narrow trading range.

Reserve Bank of New Zealand

The Reserve Bank of New Zealand (RBNZ) on Wednesday left the benchmark interest rate unchanged at 2.25%, the lowest level since July 2022, in line with most global market expectations.

The New Zealand central bank holds interest rates at their lowest level in 3.5 years.

The RBNZ confirmed that monetary policy needs to remain accommodative for some time to support the weak economic recovery, and that consumer inflation is expected to return to the target range of 1%–3% in the coming months if conditions evolve as expected.

Updated economic projections from the New Zealand central bank indicate the possibility of starting a gradual normalization cycle (rate hikes) by the fourth quarter of 2026 or early 2027, later than some had anticipated.

The RBNZ expects the official cash rate to reach 2.50% in March 2027 versus 2.75% in its previous projections.

New Zealand interest rates

• Following the meeting above, pricing for a 25 basis point New Zealand rate cut at the April 8 meeting rose to above 80%.

• To reprice those expectations, investors will monitor a series of key economic data from New Zealand in the coming period, including inflation, unemployment, and economic growth figures.