Consolidation Featured After Yesterday's Big FX Moves

2026-02-12 07:40:00 ET

The general tone in the foreign exchange market is one of consolidation after yesterday’s stronger-than-expected January jobs data injected volatility into dollar trading. The news stream is light, and tomorrow the US reports January CPI. Japan’s markets re-opened after yesterday’s holiday and extended the yen’s recovery marginally and the JGB rally. As JPY152 has been approached, we suspect the short squeeze that has lifted the yen since the weekend election has run its course, or nearly so. Meanwhile, Chinese officials have done little to deter the market from gradually driving the yuan higher. The dollar finished last year slightly below CNY6.99 and is threatening to slip through CNY6.90. The UK economy eked out 0.1% growth in Q4, but the December data were weak, and the market remains confident of a rate hike in March-April....

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