Dollar Flat, Volatility Awaits Trigger
The US dollar continued to weaken against the yen in the European session on Tuesday (February 10th), with markets still riding the wave of Japanese political euphoria following Prime Minister Sanae Takaichi's landslide victory. USD/JPY was last trading around 155.52—meaning the yen strengthened by about 0.23% today, continuing its previous surge. The yen also came under scrutiny, having previously approached the 160-per-dollar area, a level that often triggers market whispers about potential intervention.
What's making the yen more "trustworthy" isn't just intervention, but also policy direction. Takaichi's pro-growth package (tax cuts + fiscal spending) is considered capable of boosting the economy—and if inflationary pressures also rise, market expectations for a more aggressive BoJ will also strengthen. Meanwhile, the dollar remained relatively flat ahead of the release of important US economic data (employment and inflation), which was delayed due to a brief shutdown.
In Europe, the euro tended to stabilize after a sharp jump the previous day. EUR/USD held steady around 1.1906, after rising around 0.85% on Monday. From the dollar barometer perspective, the DXY also barely moved around 96.90 (still near a one-week low). The bottom line: the market isn't willing to take large positions before the data is released.
Meanwhile, the Chinese yuan also strengthened, breaking below/around 6.91 per dollar—a moment of concern as it was billed as its first strengthening to that level since 2023. The narrative: a combination of seasonal corporate conversion needs, stronger fixing signals from the central bank, plus rumors of a push for diversification away from US assets.
Among commodity currencies, movement was restrained: the AUD fell around 0.3% to 0.7070, and the NZD also fell around 0.3% to 0.60395—more likely a "catch-up" effect after the previous risk-on rally.
Source: Newsmaker.id
