US Dollar Holds Steady Amid Rising PCE Inflation and Soft GDP Data as Market Eyes Upcoming Economic Releases
February 20, 2026 – FXStreet – The US Dollar (USD) remained steady on Friday following the release of key economic data, with the US Dollar Index (DXY) posting a respectable weekly gain of nearly 1%. Even as some numbers disappointed, notable indications of rising inflation supported the greenback’s overall firmness amid mixed market sentiment.
Mixed Signals from Inflation and Growth Figures
December’s Core Personal Consumption Expenditures (PCE) inflation rate came in at 3.0% year-on-year, slightly surpassing expectations. This uptick points to persistent inflationary pressures that lend support to the USD by underpinning narratives for continued monetary tightening by the Federal Reserve.
In contrast, the flash estimate for the US fourth-quarter Gross Domestic Product (GDP) displayed softness, slowing to 1.4% from the anticipated 3.0%. The weaker-than-expected GDP growth weighed on confidence somewhat and restrained additional upside for the dollar.
Currently, the US Dollar Index is trading near 97.80. Despite the week’s gains, the index is facing challenges attracting new buyers given the unimpressive GDP data.
Key Economic Releases to Watch This Week
Financial markets will closely monitor several scheduled economic indicators that could influence the US Dollar and broader global asset classes next week:
- Monday, February 23: December Factory Orders
- Tuesday, February 24: ADP Employment Change 4-week average, December Housing Price Index, and February Consumer Confidence
- Thursday, February 26: Initial Jobless Claims and Chicago Purchasing Managers Index (PMI)
Additionally, speeches from various Federal Reserve members and central bankers from other major economies throughout the week are expected to provide further insights into monetary policy directions.
Currency Snapshots
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EUR/USD: Trading around 1.1780, the pair saw the US Dollar lose ground following the US Supreme Court ruling against former President Donald Trump’s tariff policies. The Eurozone economic calendar includes Germany’s IFO business climate, January CPI, and GDP data, alongside Eurozone-wide business sentiment figures.
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GBP/USD: Around 1.3490, the British pound faced downward pressure this week as UK jobs and inflation data fueled market expectations for a potential Bank of England (BoE) interest rate cut next month.
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AUD/USD: The Australian dollar hovered near 0.7080, holding modest gains amid subdued volatility. Investors will turn their attention to Australia’s Private Capital Expenditure figures later in the week.
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USD/JPY: Trading near 155.10, the pair retraced earlier gains after the softer US data release. Upcoming Japanese retail sales and trade reports could further influence the yen.
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USD/CAD: Sitting close to 1.3690, the Canadian dollar’s movements were muted despite a 0.4% decline in December retail sales, slightly better than expected. The Canadian current account report is scheduled for Thursday.
Gold Prices Recover on Market Uncertainties
Gold made gains, approaching the $5,100 per ounce mark after a week of losses. The precious metal’s resurgence is attributed to increased geopolitical uncertainties in the Middle East and a weaker US Dollar tone. Gold remains a preferred safe-haven and is inversely correlated with the USD, often rising when the dollar weakens.
Central Bank Watch and Upcoming Data
The week ahead promises a host of speeches from key economic policymakers including:
- Bank of England’s Michael Taylor and others on Monday
- Multiple Federal Reserve officials mid-week, including Mary Daly and Raphael Bostic
- European Central Bank’s Christine Lagarde later in the week
Upcoming releases such as Australian CPI on Wednesday, Tokyo CPI on Thursday, and various European inflation and GDP figures on Friday are anticipated to heavily influence monetary policy outlooks and market sentiment.
Editorial Note: This article reflects data and market conditions as of February 20, 2026. Readers are encouraged to consult real-time sources and expert analysis to inform trading and investment decisions.
Author: Agustin Wazne – FXStreet
Agustin Wazne covers commodities and major currency pairs, providing timely insights for global forex markets.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Market conditions can change rapidly.