US Dollar Forecast: After a brief boost from the non-farm payroll data, the US dollar index gave back its gains.
2026-02-12 02:01:03
On Wednesday (February 11), the US dollar index traded in a volatile range, initially rising before falling. In the early session, the index initially declined due to market expectations of weak US non-farm payroll data; however, the better-than-expected data release caused the dollar to rebound, and the upward reversal in US Treasury yields provided support for the dollar.
Prior to the data release, investors had hoped that weak data would push the Federal Reserve to cut interest rates in March, instead of June. However, the strong employment data allowed market expectations for a June rate cut to remain intact.
As of 23:30 Beijing time, the US dollar index was at 97.027, up 0.136 points, or 0.14%. However, this upward trend failed to continue. As of 01:05 Beijing time on February 12, the US dollar index fell back to 96.7345, down 0.1285 points, or 0.13%, erasing most of the gains made in the morning session.
Non-farm payrolls increased by 130,000, far exceeding expectations, but downward revisions to historical data dampened confidence.
January's U.S. job growth data far exceeded Wall Street expectations, causing U.S. Treasury yields to rise sharply. The 10-year Treasury yield rose 3 basis points, and the 2-year Treasury yield surged by more than 6 basis points. This market volatility reflects investors lowering their expectations for interest rate cuts by the Federal Reserve for the remainder of the year, which is beneficial for the US dollar.
January's nonfarm payrolls increased by 130,000, exceeding market expectations of 55,000 and significantly better than the revised December employment figures. However, revisions to past data lowered the total number of jobs added last year from an estimated 584,000 to 181,000, weakening market confidence in a strong job market.
Yesterday's weak retail sales data dampened the economic outlook and dragged the dollar lower; while today's non-farm payroll report initially boosted the dollar, giving the Federal Reserve more room and time to observe, the positive effect of the strong data quickly faded, and US Treasury yields also lost some upward momentum.
This Friday's CPI report will be crucial.
Despite a strong rebound in the US dollar today, the pressure has not completely subsided. Investors still need to wait for the Consumer Price Index (CPI) to be released this Friday.
At its most recent meeting in January, the Federal Reserve shifted its policy focus from the job market to inflation. Higher-than-expected CPI data would be positive for the dollar; conversely, lower-than-expected data could further depress the dollar.
Technical Analysis: The downtrend remains intact, but support levels have been tested.
(US Dollar Index Daily Chart Source: FX678)
From the daily chart and moving average system, the main trend of the US dollar index remains downward. A break above 97.973 would reverse the trend to upward; a break below today's low of 96.494 would reconfirm the downward trend, with the next downside target being the previous low of 95.551. The short-term trading range is 95.551–97.973.
This morning, the index found support at 96.494, within the 96.762-96.476 pullback range. The subsequent rebound may provide sufficient upward momentum to challenge the medium-term pullback range of 97.522-97.987. If this medium-term range is broken, the US dollar index is expected to test the 50-day moving average at 98.205 and the 200-day moving average at 98.540.
The support range of 96.762-96.476 is crucial to the short-term trend structure, especially around the time of Friday's inflation data release, and should be closely monitored.
Prior to the data release, investors had hoped that weak data would push the Federal Reserve to cut interest rates in March, instead of June. However, the strong employment data allowed market expectations for a June rate cut to remain intact.
As of 23:30 Beijing time, the US dollar index was at 97.027, up 0.136 points, or 0.14%. However, this upward trend failed to continue. As of 01:05 Beijing time on February 12, the US dollar index fell back to 96.7345, down 0.1285 points, or 0.13%, erasing most of the gains made in the morning session.
Non-farm payrolls increased by 130,000, far exceeding expectations, but downward revisions to historical data dampened confidence.
January's U.S. job growth data far exceeded Wall Street expectations, causing U.S. Treasury yields to rise sharply. The 10-year Treasury yield rose 3 basis points, and the 2-year Treasury yield surged by more than 6 basis points. This market volatility reflects investors lowering their expectations for interest rate cuts by the Federal Reserve for the remainder of the year, which is beneficial for the US dollar.
January's nonfarm payrolls increased by 130,000, exceeding market expectations of 55,000 and significantly better than the revised December employment figures. However, revisions to past data lowered the total number of jobs added last year from an estimated 584,000 to 181,000, weakening market confidence in a strong job market.
Yesterday's weak retail sales data dampened the economic outlook and dragged the dollar lower; while today's non-farm payroll report initially boosted the dollar, giving the Federal Reserve more room and time to observe, the positive effect of the strong data quickly faded, and US Treasury yields also lost some upward momentum.
This Friday's CPI report will be crucial.
Despite a strong rebound in the US dollar today, the pressure has not completely subsided. Investors still need to wait for the Consumer Price Index (CPI) to be released this Friday.
At its most recent meeting in January, the Federal Reserve shifted its policy focus from the job market to inflation. Higher-than-expected CPI data would be positive for the dollar; conversely, lower-than-expected data could further depress the dollar.
Technical Analysis: The downtrend remains intact, but support levels have been tested.
(US Dollar Index Daily Chart Source: FX678)
From the daily chart and moving average system, the main trend of the US dollar index remains downward. A break above 97.973 would reverse the trend to upward; a break below today's low of 96.494 would reconfirm the downward trend, with the next downside target being the previous low of 95.551. The short-term trading range is 95.551–97.973.
This morning, the index found support at 96.494, within the 96.762-96.476 pullback range. The subsequent rebound may provide sufficient upward momentum to challenge the medium-term pullback range of 97.522-97.987. If this medium-term range is broken, the US dollar index is expected to test the 50-day moving average at 98.205 and the 200-day moving average at 98.540.
The support range of 96.762-96.476 is crucial to the short-term trend structure, especially around the time of Friday's inflation data release, and should be closely monitored.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
