← Back to posts🧠Dollar edges up as markets brace for CPI wave

🧠Dollar edges up as markets brace for CPI wave

Published: 2/13/2026

Good morning traders from a chilly, cloud-blanketed IntelliTrade desk. It is about 2–4°C with a mostly grey sky and passing showers on the radar, which fits the mood perfectly: visibility in the macro outlook is low, and everyone is squinting at today’s CPI print and next week’s data wave.


Overall Market Sentiment



The tone is cautious and slightly risk off, with investors digesting strong US jobs, a tech-led equity selloff and now focusing on US inflation. The US Dollar Index (DXY) is around 97.1, up for a third straight session, even though it is still roughly 2 percent weaker over the month and almost 9 percent lower than a year ago.


Gold is trying to stabilise after a sharp drop below 5,000. Spot has bounced about 0.5–0.7 percent from a near one week low, trading just under that 5,000 mark as bargain hunters step in ahead of CPI after yesterday’s roughly 3 percent slide.Silver has also rebounded after an 11 percent plunge but remains down on the week.


Oil is steady to slightly firmer after a volatile stretch. Front month Brent is hovering in the high 60s, around 68.5–68.7 dollars, pointing to a market that still prices some Middle East risk but is also aware of comfortable supply and talk of a future glut.


Equities are fragile. US indices fell sharply on Thursday as investors once again rotated out of software and AI losers, and the Dow, S&P 500 and Nasdaq all posted sizeable declines.European markets followed with more modest losses, while volatility in growth and tech remains elevated. Crypto continues to trade like a high beta extension of this story, with Bitcoin grinding around the mid 60,000s after this week’s drop in digital asset market cap.





Policy and data: today and the next week




Today, Friday



The main macro event is January US CPI. Because of the recent government shutdown, the report is landing later than usual and carries extra weight as the first inflation print after the hot 130k jobs and 4.3 percent unemployment combination revealed earlier this week.


Market consensus looks for headline CPI around 2.5 percent year on year and a similar 2.5 percent for core, which would confirm that inflation is easing slowly but may not yet be comfortably below target.A softer read would revive talk of mid year cuts and likely pressure the dollar, while a sticky core print would validate the modest rebound in DXY and keep real yields supported.


With that backdrop, intraday moves are likely to be concentrated in front end US yields, DXY, gold, USDJPY and high beta FX such as AUD and NZD. Equities will be watching whether the data help calm AI driven valuation worries or add another layer of macro concern on top of sector rotation.



The next week ahead



Next week is shaped by a mix of post CPI digestion, holidays, and a broad data wave.


  • Monday 16 February: quiet start. US and Canadian markets are closed for Presidents Day and Family Day, and much of China is still disrupted by Lunar New Year. Liquidity will be thin, so price action can be choppy but not necessarily directional.
  • Euro area: December industrial production opens the week and will be read as a test of how resilient manufacturing is after recent soft patches.
  • United States: focus turns to GDP updates, PCE inflation and consumer sentiment, which together will either confirm or challenge whatever message CPI sent about the balance between growth and disinflation.
  • United Kingdom: unemployment and labour data will help shape expectations about how quickly the Bank of England can deliver its first cut after a narrow 5–4 hold in February.
  • Canada: next week brings CPI, important for the Bank of Canada’s patience narrative and for CAD, especially after the recent oil volatility.
  • Japan: CPI and flash PMIs arrive later in the week, key for gauging how soon the Bank of Japan can step further away from ultra easy settings and how much room there is for yield differentials to narrow.
  • New Zealand: on 18 February the RBNZ releases its Monetary Policy Statement. Markets overwhelmingly expect the cash rate to be left at 2.25 percent, but projections may bring forward the first hike in the next cycle, which matters for NZD relative to AUD and USD.



In short, this week’s CPI sets the tone, and next week’s mix of GDP, PCE, labour and PMI data across the G10 either reinforces a soft landing narrative or pushes markets back toward more cautious positioning.





Currency outlooks




⚖️ USD – Dollar stabilises, CPI decides whether the bounce extends



The dollar has firmed modestly after its early February slide. DXY is around 97.1, up about 0.2 percent on the day, but still roughly 2 percent weaker over the month and nearly 9 percent lower over 12 months.


The combination of strong but revised down labour data, stabilising weekly jobless claims and soft housing has given the market a nuanced message: the economy is slowing but not breaking, which argues for cuts later this year but not an emergency easing cycle.Fed funds pricing therefore assumes a first cut around the middle of 2026 and perhaps two moves by year end, a profile that is consistent with a sideways to mildly lower dollar unless inflation surprises.


Today’s CPI is the near term arbiter. A benign print near expectations would probably keep the dollar range bound, while a clear miss in either direction could generate a short burst of volatility that extends into next week’s PCE and GDP releases. For now, risks for USD look balanced, with 96.5–96.7 as the support zone on DXY and 97.5–98.0 as the resistance band that would require genuinely strong data to break.





⚖️ EUR – Euro supported by ECB pause, but growth still modest



EURUSD is trading near 1.186–1.187, close to recent highs, after gaining about 2 percent over the past month and almost 15 percent over the past year.The euro is underpinned by expectations that the European Central Bank will keep its deposit rate at 2.0 percent for an extended period, despite inflation dipping to around 1.7 percent, and by evidence that the euro area economy is sluggish but not in recession.


However, growth is far from booming, and the ECB itself sees only around 1.2 percent GDP growth for 2026. That means there is a practical ceiling to how much EUR strength policymakers will be comfortable with, especially if it tightens financial conditions before domestic demand really picks up.


For today and into next week, EUR risks versus USD look mixed. A soft US CPI and benign data run next week would probably keep EURUSD grinding toward the 1.19–1.20 region, while a sticky US inflation profile or stronger US GDP could pull it back toward the 1.17–1.18 support band.





🔻 GBP – BoE dovish split and soft data keep pressure on



GBPUSD is trading around 1.36, after failing again to hold above 1.37 and now threatening to settle near the lower half of its recent range.The Bank of England’s close 5–4 vote to hold 3.75 percent and its downgraded growth and higher unemployment forecasts leave the market expecting an earlier and more gradual easing cycle than in the euro area.


Recent UK data have not helped. Domestic GDP and inflation trends still point to only modest growth, rising joblessness and an economy that is more sensitive to energy and Brexit related frictions than many peers.


Into CPI today and the global data wave next week, risks for GBP versus USD remain tilted to the downside. Markets are watching 1.36 and then 1.35 as key support areas, with the 1.37–1.38 band still the primary resistance zone where rallies have repeatedly failed.





⚖️ CAD – Loonie caught between steady oil and firmer dollar



The Canadian dollar is trading in a tight range. Over the past week USDCAD has oscillated between about 1.35 and 1.37, with the low near 1.351 seen mid week and little follow through since.Oil in the high 60s supports Canada’s terms of trade, but the mild rebound in DXY offsets some of that benefit.


With domestic inflation close to the Bank of Canada’s target, policy can remain on hold for now, so external forces dominate. Next week’s Canada CPI is the main local risk event and will help decide whether markets continue to see the BoC as one of the more patient central banks or start to price a clearer easing path.


For the coming days and into next week, CAD risks versus USD look broadly balanced. A soft US CPI and friendly Canada CPI print could see USDCAD gravitate toward the 1.34–1.35 region, while firmer US inflation and a weaker commodity tape would probably lift it back toward 1.37–1.38.





🔺 CHF – Franc still firm as quiet hedge into data and geopolitics



The Swiss franc remains quietly strong. USDCHF is near 0.77, close to the low of its recent range and roughly 3.5 percent lower than a month ago, which means CHF has appreciated meaningfully against the dollar in both nominal and real terms.


Low Swiss inflation and modest domestic growth allow the central bank to tolerate a firm currency as a stabiliser against imported price shocks, especially when energy and geopolitical risks remain non trivial. With CPI risk in the US and a full global data calendar next week, CHF continues to act as a discreet hedge in diversified portfolios.


Short term, risks for CHF versus USD lean slightly toward further franc strength, especially if US inflation underwhelms or if risk sentiment deteriorates further on AI and tech worries. Market participants see 0.77 as a reference area, with deeper CHF gains possible toward 0.76 if DXY softens again, while a strong US CPI could trigger a bounce back toward 0.79–0.80.





🔺 JPY – Yield gap narrows at the margin as USDJPY eases



The yen has gained some ground. Recent pricing shows USDJPY around the low 150s, roughly 152–153, down from peaks closer to the high 150s as markets reassess the policy gap between the Federal Reserve and the Bank of Japan and position for US CPI.


Expectations are creeping higher that the BoJ will continue to slowly normalise policy, while US yields have eased from their highs on cooler data outside the labour market. That combination narrows rate differentials at the margin and has encouraged some carry reduction.


For the coming days and into next week, risks for JPY lean modestly toward additional strength, especially if CPI and later US GDP or sentiment numbers cool the dollar further. However, the structural yield gap remains wide, so any move lower in USDJPY is likely to be gradual unless there is a sharp risk off shock.





🔺 AUD – RBA’s hawkish shift keeps Aussie as a standout



The Australian dollar remains one of the brighter spots in G10 FX. AUDUSD has traded near recent highs around 0.71–0.715, after briefly touching above 0.714 this week, supported by the RBA’s surprise hike to 3.85 percent and guidance that further tightening is possible if inflation remains sticky.


That leaves Australia in a very different phase from central banks that are openly discussing cuts. Stabilising metals and a softer dollar backdrop compared with late 2025 add to the appeal, even though short term positioning looks more crowded.


For today and into next week, risks for AUD versus USD stay tilted to the upside, particularly if US CPI does not surprise on the hawkish side. The 0.70 region is the key near term support, while the 0.715–0.72 band is the resistance zone where some profit taking and consolidation would not be surprising on first tests.





⚖️ NZD – Kiwi steady ahead of RBNZ, tracking global risk



The New Zealand dollar is consolidating gains. NZDUSD has been trading just above 0.60, with recent highs around 0.607, supported by improved global risk appetite and AUD strength but capped by a central bank that is widely expected to leave the cash rate at 2.25 percent at next week’s meeting.


Inflation expectations have been mixed, and after a cumulative 325 basis points of cuts in this cycle, the RBNZ is in clear wait and see mode. That keeps NZD more sensitive to global risk, Chinese demand signals and US data than to local monetary surprises.


Over today’s CPI and the next week’s events, NZD risks versus USD look broadly balanced. A benign US data mix and a steady yet cautiously hawkish tone from the RBNZ would favour another push toward 0.61–0.62, while a hotter US CPI or a very cautious RBNZ message could see a dip back toward the high 0.59s as some of the recent kiwi outperformance is unwound.





Cross-asset wrap



  • 🪙 Gold:
    Gold is trying to base after a violent break below 5,000. Spot has rebounded about 0.6 percent from near one week lows and is trading just under that big round level as investors balance bargain hunting against the risk of a firmer dollar and yields after CPI. The metal remains a direct expression of how much policy space markets believe the Fed has under the new regime.
  • 🛢 Oil:
    Brent is hovering around 68.5–68.7 dollars, steady after a weekly drop that reflected both easing immediate supply fears and growing talk of a medium term glut. Near term, a modest geopolitical premium remains embedded, but the market is more focused on whether demand and OPEC discipline can absorb projected supply in 2026 and beyond. That keeps oil as an important but not dominant driver of the inflation story for now.
  • 📈 Stocks:
    Global equities are in a valuation and positioning reset phase. US indices fell sharply on Thursday as investors again hunted for the companies most exposed to AI disruption, while European markets and parts of Asia are also under pressure after recent highs. The next leg for stocks depends heavily on whether CPI and next week’s GDP and PMIs support a soft landing narrative or revive concern about a sharper slowdown.
  • ₿ Crypto:
    Crypto remains fragile. Bitcoin is holding in the mid 60,000s, with total crypto market cap drifting lower and sentiment measures sitting in fear territory. With higher real yields, a firmer dollar than a month ago and ongoing de-risking in speculative tech, digital assets are trading as a high beta macro proxy rather than an independent hedge. CPI and next week’s data will likely keep that linkage tight.






This is general, educational macro and FX commentary. It is not investment advice and not a trading signal.


Need help decoding this article? Get our free Macro Decoder ebook when signing up to our newsletter using the sign up button below! No spam, just value.