Dollar Weakens on Weaker-than-Expected CPI; Precious Metals Surge on Rate-Cut Outlook

The dollar index (DXY00) closed slightly lower at -0.01% on February 13, 2026, as January core CPI rose 2.5% y/y (vs. 2.5% expected) and broader CPI advanced 2.4% y/y, below expectations. The weaker-than-expected reading and a potential resumption of Fed rate cuts underpinned the decline, while a recovery in stocks reduced dollar liquidity demand. Swaps model odds for a -25 bp cut at the March 17–18 FOMC meeting are at 10%. Meanwhile, gold (GCJ26) gained 1.98% to $97.90 and silver (SIH26) rose 3.02% on expectations of Fed easing, lower global bond yields, and safe-haven demand amid geopolitical and US tariff uncertainty. China's PBOC added 40,000 oz to reserves to 74.19 million oz in January, and increased liquidity injections into the US financial system supported the metals. Precious metal ETF longs retreated from 3.5-year highs but remain net buyers.