Dollar Stabilizes Amid Weak Jobs Data; EUR-USD Pressured by Inflation Outlook

Dollar holds steady as it recovers from a four-year low, with EUR/USD pressured by inflation expectations despite modest weakness in key labor data. At close in New York, the Dollar Index (DXY) rose 0.3% to 97.69, reflecting anticipation of a hawkish nominee for Fed Chair and potential reduction of asset purchases. Euro/USD fell 0.1% to 1.1802 amid a 1.7% annualized inflation reading below the ECB’s 2% target, maintaining expectations of continued policy restraint. Macquarie strategist Thierry Wizman notes divergence: lower inflation risks easing monetary support, but improving growth and a favorable policy environment could outweight any easing. GBP/USD declined 0.3% to 1.3657, with the BoE expected to keep policy unchanged. USD/JPY rose 0.5% to 156.55 as Japanese PM Sanae Takaichi’s comments raised doubts over intervention to support the yen, with attention shifting to the February 8 House elections. Key Indices (as of February 5, 6:00 PM UTC): DXY 97.6557; EUR/USD 1.1800; GBP/USD 1.3652; AUD/USD 0.6993; USD/CAD 1.3656; USD/JPY 156.7900.