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The Dollar Is Firm Ahead Of January CPI

Seeking Alpha
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The US dollar strengthened against G10 currencies ahead of January’s CPI report, reflecting market anticipation of persistent inflation pressures. Stronger-than-expected January jobs data reinforced expectations of delayed Fed rate cuts. Fed funds futures now price the next rate cut in July, pushed back from June, as traders reassess monetary policy timing. The shift follows robust labor market signals and lingering inflation concerns ahead of key economic data releases. US markets’ closure on Monday may reduce liquidity earlier than usual, potentially amplifying volatility before the CPI announcement. Thin trading conditions could exacerbate currency movements in the short term. The eurozone confirmed Q4 2025 GDP growth of 0.3%, offering modest support to the euro but failing to offset the dollar’s broader strength. Economic divergence between the US and EU remains a key driver of currency trends. Chinese officials reportedly urged reducing exposure to US Treasuries, adding geopolitical pressure on dollar demand. The move aligns with broader de-risking efforts but has yet to significantly disrupt Treasury markets.
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Marc Chandler17.13K FollowersFollow5ShareSavePlay(12min)CommentsSummaryThe US dollar is firm against the G10 currencies ahead of the US January CPI.The Fed funds futures have pushed the next Fed rate cut into July from June.With the US markets closed on Monday, liquidity may dry up earlier than usual today.The eurozone confirmed Q4 2025 growth of 0.3% earlier today. Natali_Mis/iStock via Getty Images The US dollar is firm against the G10 currencies ahead of the US January CPI. The week began with news that Chinese officials were encouraging de-risking from US Treasuries. Helped by stronger-than-expected January employment data, the greenbackThis article was written byMarc Chandler17.13K FollowersFollowMarc Chandler has been covering the global capital markets in one fashion or another for 25 years, working at economic consulting firms and global investment banks. A prolific writer and speaker he appears regularly on CNBC and has spoken for the Foreign Policy Association. In addition to being quoted in the financial press daily, Chandler has been published in the Financial Times, Foreign Affairs, and the Washington Post. In 2009 Chandler was named a Business Visionary by Forbes. Marc's commentary can be found at his blog (www.marctomarket.com) and twitter www.twitter.com/marcmakingsense

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