Dollar Strengthens on Hawkish Fed Signals

2026-02-05 01:48 By Jam Kaimo Samonte 1 min. read

The dollar index strengthened above 97.5 on Thursday, scaling a near two-week high, as markets priced in a slower pace for potential Federal Reserve rate cuts.

Fed Governor Lisa Cook emphasized concerns over stalled inflation progress rather than a cooling labor market, suggesting she would not support a rate cut until price pressures ease.

Investors also considered the implications of Kevin Warsh’s nomination as Fed chair, noting his preference for a smaller Fed balance sheet and expectations that he would be less aggressive on rate reductions.

On the data front, the ADP report showed private employment growth fell well below expectations, while services activity exceeded forecasts.

Attention also turned to upcoming ECB and BOE policy meetings, which are both expected to hold rates steady.

Meanwhile, Japan’s lower house election this weekend continued to weigh on the yen amid bets on fiscal expansion.



News Stream
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