BoK Expected to Cut Interest Rate Next Week

Economic

Summary:

Bank of Korea Gov. Rhee Chang-yong speaks in this Feb. 18 photo. The Korean central bank is widely expected to lower its policy rate by 0.25 percentage point next week in an effort to prop up the economy, a poll showed Friday.

Bank of Korea Gov. Rhee Chang-yong speaks in this Feb. 18 photo.

The Korean central bank is widely expected to lower its policy rate by 0.25 percentage point next week in an effort to prop up the economy, a poll showed Friday.

According to a survey conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency, 20 out of 21 local analysts and experts polled predicted the Bank of Korea (BOK) will cut its base rate to 2.75 percent from the current 3 percent at its next rate-setting meeting slated for Tuesday.

In January, the BOK kept its benchmark interest rate frozen in the wake of the weak local currency amid political chaos and uncertainties stemming from U.S. President Donald Trump's new administration.

The on-hold decision came on the heels of two rate cuts in the October and November meetings.

"The country is facing growing downside risks centering on weak domestic demand, while the won's further weakness seems limited, which would lead the BOK to lower the policy rate by 25 basis points," said Kim Seon-tae, an expert from KB Kookmin Bank.

Nineteen out of the 21 analysts polled anticipated the key rate to be lowered to 2.5 percent in the first half of this year.

The central bank is scheduled to present an adjusted growth forecast Tuesday. BOK Gov. Rhee Chang-yong has hinted at slashing the outlook to around 1.6 percent from its previous forecast of a 1.9 percent expansion.

Korea's potential growth rate is at 2 percent, and this year may mark the first time ever that the country's yearly growth rate falls below the level.

Source: Koreatimes

To stay updated on all economic events of today, please check out our Economic calendar

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Justin

Forex

The Indian Rupee gathers strength in Friday’s Asian session.

Significant US Dollar sales and easing concerns on trade tensions underpin the INR.

The preliminary Indian and US PMI reports for February will be the highlights later on Friday.

The Indian Rupee (INR) gains ground on Friday after reaching a one-week high in the previous session. The massive US Dollar (USD) sales by foreign banks provide some support to the local currency. US President Donald Trump's optimistic comments on a fresh trade deal with China, not only lift the Chinese Yuan but also boost the INR. Any significant depreciation of the Indian Rupee might be limited amid the likely intervention by the Reserve Bank of India (RBI).

Nonetheless, Foreign Portfolio Investment (FPI) outflows and the renewed Greenback demand could weigh on the local currency. The recovery in crude oil prices might also contribute to the INR’s downside as India is the world's third-largest oil consumer.

Traders await the advanced India’s HSBC Purchasing Managers Index (PMI) report for February, which is due later on Friday. On the US docket, the S&P Global PMI, Existing Home Sales and Michigan Consumer Sentiment Index report will be released. Also, the Federal Reserve’s (Fed) Mary Daly and Philip Jefferson are set to speak on the same day.

Indian Rupee strengthens amid easing trade tensions

India's growth is estimated to slow to 6.4% in 2025 from 6.6% in 2024, as new US tariffs and softening global demand weigh on exports, said Moody's Analytics on Thursday.

US President Donald Trump said on Wednesday he will announce fresh tariffs within the next month, adding lumber and forest products to previously announced plans to impose duties on imported cars, semiconductors and pharmaceuticals.

The US Initial Jobless Claims for the week ending February 15 rose to 219,000, compared to the previous week's 214,000 (revised from 213,000), according to the US Department of Labor (DoL) on Thursday. This figure came in above the market consensus of 215K.

Fed Board Governor Adriana Kugler said late Thursday that US inflation still has "some way to go" to reach the central bank's 2% target and that its path toward that goal continues to be bumpy.

St. Louis Fed President Alberto Musalem said the risk of inflation could remain high, adding that he needs confidence that inflation is waning to support more rate cuts.

USD/INR bulls take a breather

The Indian Rupee trades on a stronger note on the day. The USD/INR pair paints the positive picture on the daily chart, with the price holding above the key 100-day Exponential Moving Average (EMA). However, further consolidation or downside cannot be ruled out as the 14-day Relative Strength Index (RSI) stands below the midline near 48.0.

The immediate resistance level for USD/INR emerges at the 87.00 psychological level. Bullish candlesticks and sustained trading above this level could set its sights on an all-time high near 88.00, en route to 88.50.

On the flip side, if the pair can’t hold the line at 86.35, the low of February 12, a drop toward 86.14, the low of January 27, could be on the cards. The next contention level to watch is 85.65, the low of January 7.

Source: FXSTREET

Risk Warnings and Disclaimers

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FastBull Featured

Daily News

[Quick Facts]

1. UK January job postings increase, dispelling some gloom in the labor market

2. Japan's January inflation rate surged:

3. Bostic: Two rate cuts are expected in 2025 amidst pervasive uncertainty

4. Makhlouf: Disinflationary Trend Faces Risks

5. Bullock: Reluctant to delay rate cuts

6. Musalem: Inflation expectations warrant vigilance

[News Details]

UK January job postings increase, dispelling some gloom in the labor market

The number of job postings in the UK increased in January for the first time in seven months, indicating that the UK's labor market may be weathering the impact of increased employer tax burdens. The Bank of England is also monitoring the labor market when considering when to cut interest rates again. The expected slowdown in hiring may curb long-term inflationary pressures. REC Deputy CEO Kate Shoesmith said: "While boards across the country are having difficult discussions, today's report suggests that it is too early to be pessimistic about the overall outlook for the UK economy in 2025.

Japan's January inflation rate surged

Japan's CPI rose 4% YoY, according to figures released on Friday, the highest level since January 2023. Core CPI increased by 3.2% YoY, reaching its highest point since June 2023. "Core" inflation, which excludes fresh food and energy prices and is closely monitored by the Bank of Japan (BOJ), edged up to 2.5%.

The latest inflation figures strengthen the case for the BOJ to raise interest rates. The BOJ considered tightening rates at its January meeting, and its summary of opinions cautioned against inflation risks and a weaker yen.

Makhlouf: Disinflationary Trend Faces Risks

The disinflationary trend is at risk, with a highly uncertain outlook. The European Central Bank has cut rates five times since June of last year and is expected to lower the deposit rate to 2.5% next month. Policymakers are confident that inflation will fall to 2% this year, but they are concerned that the instability of the Eurozone economy could drag down price growth below the target.

Bostic: Two rate cuts are expected in 2025 amidst pervasive uncertainty

Atlanta Fed President Bostic stated on Thursday that the path to price stability, despite some market volatility, remains intact. Housing costs have been a significant contributor to persistent inflation, although market-based measures of rent price growth are more subdued than official inflation statistics. This suggests that the softening in market rents should eventually be reflected in inflation figures.

He supports a reduction in monetary policy restrictiveness, citing a shift in the risk balance between the dual mandate of price stability and maximum employment. While inflation has declined significantly, it remains above target, and the urgency of achieving price stability is less pressing than before, given a labor market that, while cooling, remains robust.

The Federal Reserve should still be able to cut interest rates by 50 basis points this year, although the impacts of former President Trump's trade and immigration policies remain highly uncertain. However, there is considerable uncertainty surrounding this forecast, with numerous factors potentially exerting influence in either direction.

Makhlouf: Disinflationary Trend Faces Risks

Bullock: Reluctant to delay rate cuts

Reserve Bank of Australia (RBA) Governor Bullock stated on Friday that the RBA is averse to delaying the easing of monetary policy, a factor contributing to the RBA's decision to cut interest rates this week for the first time in over four years. Acknowledging to lawmakers that the central bank was late in initiating rate hikes during the previous tightening cycle, she indicated that the RBA is now more cognizant of the policy lags when considering the easing of policy.

Musalem: Inflation expectations warrant vigilance

In his Thursday remarks, St. Louis Federal Reserve President Musalem noted that while inflation is still expected to converge toward the Federal Reserve's 2% target, market indicators and survey data suggest a notable rise in short-term inflation expectations over the past three months. This development could necessitate a more restrictive monetary policy stance.

The risks of inflation remaining above 2% or accelerating appear skewed to the upside. Furthermore, another potential scenario must be considered: a weakening labor market coupled with a halt or reversal in the disinflationary trend. Stagflation, characterized by sluggish economic growth and elevated inflation, would present the most challenging environment for the central bank, forcing the Federal Reserve to prioritize either its employment or inflation mandate.

Given robust economic expansion, a tight labor market, accommodative financial conditions, core inflation exceeding 2%, and recent increases in some inflation expectations, the risk of inflation expectations becoming unanchored is elevated compared to a scenario characterized by economic slack and a lack of experience with high inflation among consumers and businesses. The current environment presents a more challenging situation than previously observed.

If the inflation persists at its current above-target levels, or if inflation expectations indeed rise, a more restrictive monetary policy stance may be warranted relative to the baseline trajectory.

[Today's Focus]

UTC+8 16:15 Preliminary reading of France's manufacturing PMI for February

UTC+8 16:30 Preliminary reading of Germany's manufacturing PMI for February

UTC+8 17:00 Preliminary reading of Eurozone's manufacturing PMI for February

UTC+8 17:30 Preliminary reading of UK's manufacturing PMI for February

UTC+8 22:30 Speech by ECB Chief Economist Lane

UTC+8 22:45 Preliminary reading of US S&P Global Manufacturing PMI for February

Risk Warnings and Disclaimers

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Owen Li

Cryptocurrency

Bitcoin (BTC/USD) is holding above $95k but facing significant resistance.

While spot Bitcoin ETFs have attracted substantial investments, there have been recent net outflows, and on-chain data suggests a cooling down in speculative appetite.

Strategy’s potential Bitcoin purchase, following a $2 billion fundraising, could be a catalyst for a future bull run.

Bitcoin has regained momentum after finding support at the key $95k level this week before rising to trade at 98357 at the time of writing. The recent consolidation suggests that Bitcoin could be ready for its next big rally, with a move higher looking appealing once more.

Crypto Heatmap, February 20, 2025

Source: TradingView (click to enlarge)

ETF Flows

Even though Bitcoin’s price fell from its all-time high on January 20, data from CoinShares shows that spot ETFs tied to Bitcoin have still attracted a huge $5.6 billion in new investments.

However, over the last few days we have seen a consistent amount of net outflows with figures of 60.7, 64.1 and 94.6 million USD in net outflows since Tuesday.

Source: Farside Investors

The Week on Chain – Glassnode Data Reveals Downside Risks

Money flowing into the market is slowing down, and trading in derivatives is dropping. The way short-term investors are buying now looks similar to May 2021, which was a tough time for the market.

Overall, in recent weeks markets are seeing the momentum of capital inflows has declined for all digital assets. This signals a meaningful cooling down in speculative appetite and alludes to a potential for capital rotation out of riskier assets on the road ahead.

This is in line with the overall market sentiment at the moment.Although US stock markets continue to hold near highs, the rise of Gold is a clear sign that markets remain nervous as haven demand continues to propel the precious metal to fresh highs.

Momentum in spot markets is slowing down, and less money is going into perpetual futures. This drop in demand has caused a big decline in open interest across major assets, showing less speculative trading and lower profits from cash-and-carry strategies.

The drop in open interest shows that traders are cutting back on risky leveraged bets, likely because the market feels weaker and less certain. The biggest decline is in Memecoins, which usually attract short-term traders but quickly lose popularity when confidence fades.

Source: Glassnode

Microstrategy or ‘Strategy’ Gearing Up for Fresh Buys?

MicroStrategy or as we should get used to calling them, Strategy didn’t buy any Bitcoin last week, keeping its total at 478,740 BTC for the second time.

However, MicroStrategy has hinted at a new Bitcoin purchase with its recent fundraising effort. On February 20, the company announced it had successfully priced a $2 billion offering of 0% convertible notes due in 2030. The deal, set to close on February 21, also gives buyers the option to purchase an extra $300 million in notes.

Will such a purchase prove to be the catalyst for another bull run?

Technical Analysis BTC/USD

Bitcoin (BTC/USD) from a technical standpoint on the daily timeframe sees price eyeing a breakout following a period of consolidation.

The consolidation between 94000 and 100000 has lasted for the last two weeks with Tuesday seeing price dip to a low of 93340 before reclaiming the 95000 handle.

Thursday daily candle did close back above the 100-day MA resting at 97899 but there are significant hurdles ahead. The 50-day MA rests at 99059, just shy of the psychological 100000 level.

Bitcoin (BTC/USD) Daily Chart, February 20, 2024

Source: TradingView.com (click to enlarge)

Dropping down to a two-hour chart and there may be scope for a short term pullback. Significant support rests below current price as we have the 50,100 and 200-day MA converging between the 96000-97000 handles.

This makes this a key area of confluence which could serve as a base for a move toward the 100000 psychological level and beyond.

Immeidate support rests at 97000 before the key 95000 handle comes back into focus.

Resistance rests at 99059 and 100000 before markets will turn their attention toward the 102157 resistance handle.

Bitcoin (BTC/USD) Two-Hour (H2) Chart, February 20, 2024

Source: TradingView.com (click to enlarge)

Support

97000

95000

93200

Resistance

99059

100000

102157

Source: ACTIONFOREX

Risk Warnings and Disclaimers

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Cohen

Economic

Forex

Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway noted on Friday, “Official Cash Rate (OCR) forecasts indicate another 75 basis points (bps) easing.”

Additional quotes

New Zealand Dollar (NZD) drop will boost export revenues.

Output gap will help contain inflation pressures.

Weaker NZD will aid economic recovery.

Willing to look through inflation uptick this year.

Lowering OCR below neutral is part of the risk conversation.

Currently sees no prospect of rate increases.

Taking OCR below neutral is not the central projection.

New Zealand Dollar PRICE Today

The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the weakest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.16%	0.11%	0.50%	0.09%	0.15%	0.10%	0.18%
EUR	-0.16%		-0.04%	0.33%	-0.07%	-0.01%	-0.06%	0.02%
GBP	-0.11%	0.04%		0.40%	-0.02%	0.04%	-0.02%	0.07%
JPY	-0.50%	-0.33%	-0.40%		-0.36%	-0.31%	-0.38%	-0.29%
CAD	-0.09%	0.07%	0.02%	0.36%		0.05%	0.00%	0.08%
AUD	-0.15%	0.00%	-0.04%	0.31%	-0.05%		-0.05%	0.02%
NZD	-0.10%	0.06%	0.02%	0.38%	-0.01%	0.05%		0.08%
CHF	-0.18%	-0.02%	-0.07%	0.29%	-0.08%	-0.02%	-0.08%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).

Source: FXSTREET

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Alex

Economic

Forex

The Australian Dollar declines as the US Dollar experiences a technical upward correction.

Australia’s Judo Bank Manufacturing PMI increased to 50.6 in February, up from 50.2 in January.

RBA's Bullock warned that an overly rapid or excessive monetary policy easing could hinder the disinflation process.

The Australian Dollar (AUD) edges lower against the US Dollar (USD) following the release of Judo Bank’s Purchasing Managers Index (PMI) on Friday. However, the AUD/USD pair saw gains after US President Donald Trump announced potential progress in trade negotiations with China, easing market concerns over tariffs.

Australia’s Judo Bank Manufacturing PMI rose to 50.6 in February, up from 50.2 in January. The Services PMI improved to 51.4 from 51.2, while the Composite PMI edged up to 51.2 from 51.1.

Reserve Bank of Australia (RBA) Governor Michele Bullock cautioned that easing monetary policy too quickly or excessively could stall disinflation, potentially keeping inflation above the target midpoint. Bullock emphasized the RBA’s commitment to data-driven decisions and careful risk assessment, suggesting that while rate cuts remain a possibility, a cautious approach is necessary.

Australian Dollar appreciated as US Dollar struggled following weak US jobless claims

The US Dollar Index (DXY), which measures the USD against six major currencies, gains ground near 106.50 at the time of writing. However, the DXY faced challenges following weak US jobless claims data and mixed Federal Reserve (Fed) commentary.

US Initial Jobless Claims for the week ending February 14 rose to 219,000, exceeding the expected 215,000. Meanwhile, Continuing Jobless Claims increased to 1.869 million, slightly below the forecast of 1.87 million.

Federal Reserve Board Governor Adriana Kugler stated on Thursday that US inflation still has "some way to go" before reaching the central bank's 2% target, noting that the path remains uncertain, according to Reuters.

St. Louis Fed President Alberto Musalem cautioned about potential stagflation risks and rising inflation expectations. Meanwhile, Atlanta Fed President Raphael Bostic kept the possibility of two rate cuts this year open, contingent on economic developments.

President Trump indicated that a new trade deal with China is possible and expects Chinese President Xi Jinping to visit. He also mentioned discussions with China regarding TikTok and noted that his administration is considering a 25% tariff on lumber and forest products.

The latest Federal Open Market Committee (FOMC) Meeting Minutes reaffirmed the decision to keep interest rates unchanged in January. Policymakers emphasized the need for more time to assess economic activity, labor market trends, and inflation before considering any rate adjustments. The committee also agreed that clear signs of declining inflation are necessary before implementing rate cuts.

President Trump has confirmed that a 25% tariff on pharmaceutical and semiconductor imports will take effect in April. Additionally, he reaffirmed that auto tariffs will remain at 25%, further escalating global trade tensions.

The Australian Bureau of Statistics (ABS) reported on Thursday that Australia’s seasonally adjusted Unemployment Rate rose to 4.1% in January from 4.0% in December, aligning with market expectations. Additionally, Employment Change came in at 44K for January, down from a revised 60K in December (previously 56.3K), but still exceeding the consensus forecast of 20K.

Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser stated while speaking to Bloomberg News on Thursday that the central bank’s policy “is still restrictive.” Hauser noted that the latest jobs data showed little cause for concern.

The Reserve Bank of Australia (RBA) lowered its Official Cash Rate (OCR) by 25 basis points to 4.10% on Tuesday—the first rate cut in four years. RBA Governor Michele Bullock acknowledged the impact of high interest rates but cautioned that it was too soon to declare victory over inflation. She also emphasized the strength of the labor market and clarified that future rate cuts are not guaranteed, despite market expectations.

Technical Analysis: Australian Dollar tests psychological barrier at 0.6400

The AUD/USD pair hovers around 0.6400 on Friday, trading within an ascending channel that suggests a bullish market sentiment. The 14-day Relative Strength Index (RSI) remains above 50, reinforcing the positive outlook.

On the upside, the AUD/USD pair tests the key psychological resistance at 0.6400, followed by the ascending channel's upper boundary at 0.6420.

Immediate support could be at the nine-day Exponential Moving Average (EMA) of 0.6350, followed by the 14-day EMA at 0.6330. A stronger support zone lies near the channel's lower boundary at 0.6320.

AUD/USD: Daily Chart

Australian Dollar PRICE Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.15%	0.11%	0.45%	0.08%	0.16%	0.09%	0.18%
EUR	-0.15%		-0.05%	0.32%	-0.07%	-0.01%	-0.07%	0.02%
GBP	-0.11%	0.05%		0.38%	-0.02%	0.04%	-0.02%	0.07%
JPY	-0.45%	-0.32%	-0.38%		-0.34%	-0.29%	-0.36%	-0.27%
CAD	-0.08%	0.07%	0.02%	0.34%		0.06%	0.00%	0.09%
AUD	-0.16%	0.00%	-0.04%	0.29%	-0.06%		-0.06%	0.02%
NZD	-0.09%	0.07%	0.02%	0.36%	-0.01%	0.06%		0.08%
CHF	-0.18%	-0.02%	-0.07%	0.27%	-0.09%	-0.02%	-0.08%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

Source: FXSTREET

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Owen Li

Economic

Forex

NZD/USD trades with mild gains near 0.5765 in Friday’s early Asian session.

US Initial Jobless Claims came in weaker than expected last week.

Trump tariff threats could drag the Kiwi lower.

The NZD/USD pair extends the rally to around 0.5765 during the early Asian session on Friday, pressured by the softer US dollar (USD). Traders will keep an eye on the preliminary reading of the US S&P Global Purchasing Managers Index (PMI) for February, which is due later on Friday.

The weaker-than-expected US Initial Jobless Claims weigh on the Greenback. Data released by the US Department of Labor (DoL) on Thursday showed that the US Initial Jobless Claims for the week ending February 15 rose to 219K, compared to the previous week's revised tally of 214K (from 213K). This figure came in above the market consensus of 215K.

The Reserve Bank of New Zealand (RBNZ) cut interest rates by 50 basis points (bps) to 3.75% at the latest policy meeting on Wednesday, as widely expected. RBNZ Governor Adrian Orr signaled that further rate cuts are on the way in the coming months amid moderating inflation as policymakers sought to boost a struggling economy. ING analysts said, “NZD is benefiting from seeing the end of the easing cycle sooner than previously thought.”

However, the concern about US tariffs US President Trump’s tariff threats might exert some selling pressure on the Kiwi. On Wednesday, Trump said that he would announce fresh tariffs within the next month, adding lumber and forest products to previously announced plans to impose duties on imported cars, semiconductors and pharmaceuticals.

Source: FXSTREET

To stay updated on all economic events of today, please check out our Economic calendar

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BoK Expected to Cut Interest Rate Next Week

Source: Koreatimes

USD/INR Softens Ahead of Indian/US PMI Releases

Source: FXSTREET

February 21st Financial News

[Quick Facts]

[News Details]

[Today's Focus]

Bitcoin (BTC/USD) Holds Above $95K but Faces Significant Resistance Ahead

Source: TradingView.com (click to enlarge)

Source: ACTIONFOREX

RBNZ’s Conway: OCR Forecasts Indicate Another 75 Basis Points (bps) Easing

Source: FXSTREET

Australian Dollar Depreciates Stronger Judo Bank PMI, Bullock’s Cautious Speech

Source: FXSTREET

NZD/USD Posts Modest Gains Above 0.5750 Ahead of Us PMI Release

Source: FXSTREET

Risk Disclosure