Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Dollar holds firm as Fed cut bets fade
Nonfarm payrolls rose by 50k (consensus 70k), and the unemployment rate dipped to ~4.4%. Markets have now priced in rate cut later out in June 2026.
The US Treasury curve flattened aggressively; 2-year yields rose ~4.5bps as administration officials called for the purchase of $200bn in mortgage bonds.
Senior central bank officials described the current policy phase as “fine-tuning,” emphasizing that inflation remains too high to warrant large policy moves.
The S&P 500 and Dow logged new records; Intel jumped 11% following high-level administration meetings, while Meta advanced on nuclear energy deals to power data centers.
In Australia, merger talks between two mining heavyweights were confirmed as being in “serious” stages, potentially creating the world’s largest miner.
Dollar index is now at 99.13 at the time of writing, with AUD/USD down 0.2% whilst NZD/USD down 0.35% overnight.
Yen edges lower as Takaichi weighs February snap election
Japanese Prime Minister Sanae Takaichi is weighing a snap parliamentary election in early February, according to the Yomiuri newspaper. Government sources cited by the paper said Feb. 8 and Feb. 15 are under consideration.
Takaichi’s Liberal Democratic Party, in coalition with the right‑wing Ishin party, remains a few seats short of a majority in the lower house.
The yen slipped, with dollar/yen trading at 158.06. The next key support level is at 21-day EMA of 156.62 followed by 50-day EMA of 155.46. Intervention risks loom as USD/JPY approaches 160 key handle.
Inflation and growth data take center stage
The US December CPI (Wednesday) is the marquee event, with both headline and core inflation expected at 0.3% MoM and 2.7% YoY. These figures will be pivotal for shaping Fed expectations and USD direction. US PPI (Thursday) and Germany’s final December CPI (Friday) add further inflation signals, while France’s harmonized CPI and Japan’s PPI round out the global price picture.
US retail sales (Thursday) will offer a timely read on consumer resilience, while UK November GDP (Thursday) and Germany’s 2025 GDP (Thursday) provide key updates on European growth momentum. China’s December trade data will be closely watched for signs of stabilization in exports and imports.
US initial jobless claims (Friday) and the NFIB small business optimism survey (Tuesday) will help gauge the health of the US labor market and business sentiment. Australia’s job vacancies and consumer confidence, along with New Zealand’s manufacturing PMI, provide additional context for the Antipodean currencies.
Antipodeans down on stronger Dollar
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 12 – 16 January
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
