On February 13th, Gabriel Makhlouf, a member of the European Central Bank's Governing Council and Governor of the Central Bank of Ireland, stated that the next move by policymakers could involve either raising or lowering borrowing costs. Makhlouf commented, "I do not rule out further rate cuts, and indeed, I do not rule out rate hikes either. What I mean is that, at present, inflation appears to be steadily progressing towards our target, so we are in a good position." Earlier this month, ECB officials maintained borrowing costs unchanged for the fifth consecutive meeting, with President Christine Lagarde reiterating the bank's consistent message that they view their current stance as "favorable." Investors and economists anticipate that interest rates will remain steady until 2027. Makhlouf noted, "Inflation itself had surged to very high levels but has been receding and is now essentially at the target level. The ECB is proceeding according to plan, striving to achieve the 2% inflation target in the medium term." He indicated that, despite "many uncertainties," the ECB would continue with its meeting-by-meeting approach, stating, "We will examine the evidence, analyze the data—it is difficult to predict precisely what will happen in the future. But based on the current situation, we are on track."

Separately, the UK Office for National Statistics reported on Thursday that Gross Domestic Product grew by 0.1% quarter-on-quarter in the fourth quarter, matching the growth rate of the previous quarter but falling short of the 0.2% consensus forecast by economists. According to data released by the ONS in early 2025, the overall economic climate during this period was influenced by pre-budget uncertainty, leading to cautious market sentiment. Particularly ahead of Chancellor Rachel Reeves' budget announcement on November 26th, frequent expectations of tax increases suppressed behavior among businesses and consumers. The statistics office also revised down the monthly GDP data for the three months leading to November, adjusting the previously reported 0.1% growth to a contraction of 0.1%. This revision indicates that economic volatility before the budget was more pronounced than initially expected. However, recent surveys suggest that following the budget's release, market confidence has shown slight improvement, with some businesses and consumers reporting better expectations. Nevertheless, uncertainties in the political landscape—including political pressures facing Prime Minister Keir Starmer—could also affect the sustainability of this positive sentiment.

Key data to watch today include the Eurozone's seasonally adjusted trade balance for December, the revised quarter-on-quarter GDP growth rate for the fourth quarter in the Eurozone, and the unadjusted annual US Consumer Price Index rate for January.

**USD Index** The US Dollar Index experienced sideways movement yesterday, closing nearly flat on the daily chart, with the current exchange rate hovering around 97.00. The unexpectedly strong US non-farm payrolls report released earlier, which dampened expectations for Federal Reserve rate cuts, provided some support for the currency. However, weak US initial jobless claims data released during the session exerted some downward pressure. After consolidating, the index ultimately ended the day unchanged. Today, focus is on resistance near 97.50, with support located around 96.50.

**EUR/USD** The Euro traded within a narrow range yesterday, closing slightly lower, and is currently trading around 1.1870. The ongoing impact of the surprisingly strong US non-farm payrolls report, which has cooled expectations for Fed rate cuts, was the primary factor weighing on the Euro. However, weak economic data from the US released during the session, coupled with expectations that the ECB's rate-cutting cycle is nearing its end, limited the pair's downside. Attention today is on resistance near 1.1950, with support around 1.1800.

**GBP/USD** The British Pound consolidated yesterday, ending the day with a slight decline, and is currently trading near 1.3620. The continued cooling of expectations for Federal Reserve rate cuts, fueled by the strong non-farm payrolls report, was the main factor pressuring the Pound lower. Additionally, a series of disappointing UK economic data releases during the session further contributed to the currency's weakness. Today, resistance is eyed near 1.3700, while support is found around 1.3550.