Dollar Remains Steady, CPI the Next Test
The US dollar index held steady on Thursday (February 12th) after a volatile session the previous day, as market participants weighed the "strength" signals from US employment data, which diminished the likelihood of a Fed interest rate cut in the near future. The latest movement shows the DXY around 96.91, up around +0.08% on the day—still near the 97 area, which is a psychological benchmark for traders.
Support came from a solid employment report: January payrolls increased by 130,000 and the unemployment rate fell to 4.3%, suggesting the labor market is beginning to "stabilize" heading into early 2026. However, mixed signals emerged from jobless claims—initial jobless claims were 227,000, slightly higher than the 222,000 expected—so the market isn't completely bullish on the dollar yet.
The next focus is on the January CPI release (Friday), as this inflation figure is usually the quickest to shift interest rate expectations. Currently, the market still widely expects the Fed to hold its March meeting, while the timing of the first rate cut is likely to shift to mid-year (many pricing points to around July rather than sooner).
In the forex market, the dollar is also benefiting from a weakening yen after strengthening for several sessions due to "verbal intervention" by Japanese authorities. So, for now, the narrative is simple: employment data keeps the dollar from falling easily, but the CPI will determine whether this stability continues—or volatility returns.
Source: Newsmaker.id
