Forexlive Americas FX news wrap 20 Feb. The USD moves lower. USDJPY falls to new 2025 low.

• Major US indices close lower but retraces losses
• US crude oil futures settled $72.57
• More from Musalem: Expects inflation to wane but there are upside risks
• White House nat sec advisory Waltz: Zelensky needs to return to table on critical minerals
• MUFG: JPY now the best-performing G10 currency in 2025, staying short EUR/JPY
• Morgan Stanley G10 FX outlook: AUD, JPY, GBP, NZD, CAD, CHF
• US sells 30-year TIPS at 2.403% vs 2.40% WI
• Zelenskiy:Ukraine is ready for strong and useful agreement w/US on investments &insecurity
• More Musalem: Productivity speed up is reaching its trend
• US Middle East envoy Witkoff: Trump plan for Gaza is not an eviction plan for Palestinians
• St. Louis Fed Pres. Musalem: Assurance inflation is returning to 2% before policy changes
• Weekly crude oil inventory build of 4.633M vs estimate 3.144M
• European indices are closing the day with mixed results
• Atlanta Fed Bostic Doesn’t expect new burst of inflation, though widespread uncertainty
• Feds Goolsbee: PCE is not likely to be as sobering as the CPI numbers
• EU Consumer confidence flesh for February -13.6 versus -14.0 estimate
• Leading index for January -0.3% versus -0.1% estimate
• GEOPOLITICs today: Zelenskiy meets with US envoy Kellogg. Putin talks with Saudi about oil
• Trump: BALANCE BUDGET NOW??? LETS GIVE IT S A SHOT. LOTS OF MONEY COMING IN FROM TARIFFS.
• Canada January producer price index +1.6% m/m vs +0.2% expected
• Philadelphia Fed Business index for February 18.1 vs 20.0 estimate
• Canada January new housing price index -0.1% vs -0.1% prior
• US initial jobless claims 219K vs 215K estimate
• ForexLive European FX news wrap: USD/JPY flirts with break of 150.00 level
• US Treasury secretary Bessent: I don’t want others to manipulate their currencies
• ECB’s Simkus: I agree with expectations of 3 more cuts in 2025

The USD fell vs all the major currencies with the fall vs the JPY (-1.21%) , and the NZD (-1.03%), the biggest movers. The greenback fell the least vs the CAD (-0.44%) . The dollar index (DXY) fell -0.75%, its 3rd largest decline since November 2024.

The USDJPY moved to a new low for the year and to the lowest level going back to December. At session lows, the pair moved to a key swing area between 149.08 and 149.39. The 50% midpoint of the move up from September comes in at 149.22 between the area. That area will be key going into the new trading day.

For the USDCHF< the pair moved to test the low of the trading range going back to mid-December between 0.8965 to 0.9196 (see chart below). That level will be a key barometer for buyers and sellers in the new trading day. Moving below would be more bearish. Stay above and the pair can bounce from the 2 week decline.

The GBPUSD stretched higher today and at session highs tested the pairs key 100 day MA at 1.2660. That level will be a key barometer for the pair in the new trading day.

The AUDUSD is trading at it’s highest level since mid-December and is moving toward key technical targets defined by the 38.2% of the move down from the September high at 0.64139 and then the falling 100 day MA at 0.6421. The current price is at 0.6394 after trading as high as 0.6404.

US rates were lower for the day although yields are near the middle of the days trading range. Looking at the yield curve:

• 2 year 4.269%, -0.4 bps
• 5 year 4.346%, -2.5 bps
• 10 year 4.505%, -3.0 bps
• 30 year 4.746%, -1.7 bps

Concerns about the impact of tariffs, DOGE layoffs and US growth is also weighing on the greenback.

There were three Fed members who spoke today including Fed’s Bostic, Musalem and Goolsbee. They tended to be cautious although Fed’s Bostic did still see 2 cuts between now and the end of the year.

A summary of their comments:

• St. Louis Fed President Musalem insists inflation must show clear progress toward 2% before policy changes. While he expects inflation to decline, risks remain tilted upward, and persistent inflation could warrant further tightening. He flagged stalling productivity gains and broader economic risks, including tariffs, which he views as one-time price increases needing further study. Musalem sees modestly restrictive policy as necessary to reach the 2% target but cautions that it will take time. Despite uncertainty, growth remains resilient, and confidence in inflation’s decline is key before considering rate cuts.
• Atlanta Fed’s Bostic expects inflation to decline toward 2% but acknowledges uncertainty and volatility in the data. While the labor market is easing, it remains stable, supporting the Fed’s dual mandate. He still anticipates two rate cuts but warns that outlook could change. Bostic highlights business concerns over deregulation, tariffs, and immigration and notes some firms may pass import taxes to consumers. He stresses the Fed must avoid balance sheet instability and is reviewing its employment framework. Bostic sees policy as moderately restrictive but remains cautious about inflation risks before adjusting rates.
• Chicago Fed President Goolsbee expects PCE inflation to be milder than CPI, indicating a stable outlook. He sees steady employment and tight credit conditions but remains cautious about supply shocks, particularly from tariffs. While 2018 tariffs had little inflation impact, he warns that larger disruptions, like COVID-era shocks, could be more concerning.

US stocks opened lower and stayed in the red for the entire day, but bounced late taking the indices comfortably off the lows for the day:

• Dow industrial average fell -450.94 points or -1.01% at 44176.65. However, at session lows, the index was down -677.43 points.
• S&P index fell -26.63 points or -0.43% at 6117.52. At session lows, the index was down -59.56 points.
• NASDAQ index fell -93.89 points or -0.47% at 19962.36. At session lows the index was down to 61.23 points
• Russell 2000-20.71 points or -0.91% at 2261.74. At session lows the index was down -32.34 points.

Crude oil rose $0.41 or 0.57% at $72.81 after bouncing off the 200-hour MA near the low for the day at $71.76.

Gold is trading up $6.16 or 0.21% at $2939.32. The high price for the day i. Nched closer to the $3000 level at $2954.94

The price of Bitcoin moved higher and traded to the highest level since February 14 at $98,758.

TGIF to all.

This article was written by Greg Michalowski at www.forexlive.com.