UPDATE: The dollar remains under intense scrutiny as traders gear up for a pivotal week packed with crucial economic data. Credit Agricole has just released a note emphasizing that the “USD rebalancing” theme will dominate discussions, with significant reports expected to shape market sentiment.
Traders are bracing for the vital TIC report for December 2025, scheduled for February 18, which will shed light on foreign demand for US Treasuries. This comes as foreign holdings of US debt reached a staggering $9.36 trillion in November 2025, despite a notable decline in China’s holdings to their lowest levels since 2008.
Market analysts are keenly aware that the TIC report only reflects China’s holdings in US custodians, leaving room for speculation about their purchases through non-US channels. This distinction is critical, as it could mean that China is still accumulating Treasuries through intermediaries like Belgium and Luxembourg, which are increasingly influential players in the market.
Additionally, traders will focus on the core PCE deflator data and PMIs for February, alongside the minutes from the January FOMC meeting. These economic indicators will provide insight into the Federal Reserve’s monetary policy trajectory, which could significantly impact the dollar’s value.
Adding to the market’s tension is the upcoming US Supreme Court decision regarding the trade tariffs implemented during the Trump administration. The court will announce its ruling on February 20, which could introduce new volatility and risk for investors.
Credit Agricole suggests that many of the potential negatives related to the Federal Reserve are already priced into the dollar, predicting a consolidation phase unless unexpected data emerges. For the dollar to secure a more sustained recovery, evidence of ongoing foreign investment in US assets is essential.
Traders and investors alike are preparing for a week that could redefine the dollar’s trajectory. With multiple high-stakes reports and a significant Supreme Court ruling on the horizon, this week is critical for anyone tracking currency movements and economic trends.
Stay tuned for updates as these developments unfold.
