Jobless Claims Support Dollar, Focus Shifts to Tokyo CPI
The US dollar strengthened slightly on Thursday (February 26th) after labor data showed that labor market conditions remained stable. Initial Jobless Claims for the week ending February 21st were recorded at 212,000, lower than the 215,000 expected, although slightly above the previous figure of 208,000. Meanwhile, Continuing Claims fell to 1.833 million, confirming that layoff pressures have not widened and that hiring activity remains subdued but not worsening.
Following the release of the data, the US Dollar Index (DXY) traded around 97.90, recovering some of the losses experienced on Wednesday. This strengthening occurred despite Fed Governor Stephen Miran reiterating his dovish stance and signaling a target of cutting interest rates to 1% this year, while stating that inflation was no longer a major concern as prices were considered relatively stable.
In major currency markets, EUR/USD weakened to the 1.1790 area after recording an intraday gain. Market participants are still digesting comments from ECB President Christine Lagarde, who expressed cautious confidence that inflation remains on track to 2% in the medium term, with food price pressures expected to ease further through 2026. Meanwhile, GBP/USD fell to near 1.3480 amid growing speculation of a Bank of England interest rate cut in March, after Governor Andrew Bailey called the decision "very open."
In the Asia-Pacific region, AUD/USD held around 0.7100, paring some losses but remaining in the red. However, stronger-than-expected Australian inflation data had boosted expectations that the RBA could maintain a tighter policy stance for longer. Meanwhile, USD/JPY fell to around 156.20, moving neutral after a volatile session, with the market now awaiting the release of the February Tokyo CPI, which could potentially determine the yen's direction in the near term.
Source: Newsmaker.id
