Week Ahead: Dollar set for week of turmoil?

FXTM’s USDInd ↑ almost 1% in February
US NFP + CPI report = fresh volatility?
Dollar still weakest G10 currency year-to-date
US NFP forecast to trigger moves of ↑ 0.6% & ↓ 0.4%
Technical levels: 99.00, 98.00 and 96.50.

A string of high-impact data released in the United States and ongoing trade developments may pump global markets with fresh volatility.

The week ahead features an election in Japan, the delayed US jobs report and key CPI figures:

Sunday, 8th February

JPY: Snap lower-house election in Japan

Monday, 9th February

MXN: Mexico Inflation Rate (Jan)
AUD: Australia Westpac Consumer Confidence Change (Feb)
TWN: Taiwan trade
USDInd: Fed Governor Waller, Atlanta Fed President Bostic speech

Tuesday, 10th February

GBP: UK BRC Retail Sales Monitor (Jan)
AUD: Australia NAB Business Confidence (Jan)
FRA40: France Unemployment Rate (Q4)
USDInd: US Retail Sales (Dec), Cleveland Fed Hammack speech
WTI/Brent: US API Crude Oil Stock Change (w/e Feb 6)

Wednesday, 11th February

AUD: RBA Hauser Speech
CNY: China Inflation Rate (Jan), PPI (Jan)
USDInd: US NFP (Jan), Unemployment Rate (Jan), Average Hourly Earnings (Jan)
WTI/Brent: US EIA Crude Oil Stocks Change (w/e Feb 6)

Thursday, 12th February

JPY: Japan PPI
GBP: UK GDP Growth Rate (Dec, Q4 2025), Industrial Production (Dec), Manufacturing Production (Dec)
USDInd: US Existing Home Sales (Jan), Initial Jobless Claims (w/e Feb 7)

Friday, 13th February

CNY: China House Price Index (Jan)
GER40: Germany Wholesale Prices (Jan)
EUR: Eurozone Balance of Trade (Dec), Employment Change (Q4)
TWN: Taiwan GDP
USDInd: US Inflation Rate (Jan)

The spotlight shines on FXTM’s USDInd which is essentially flat year-to-date after clawing back recent losses.

Here are 4 forces that may rock the dollar:

1) Japan elections

Over the weekend, Japanese voters go to the polls for a snap lower-house election that may reshape the country’s political structure.

Investors seem to be positioning for a decisive victory for Prime Minister Sanae Takaichi’s Liberal Democratic Party.

Such a win could boost Japanese stocks and weaken the Yen due to her cautious approach to BoJ rate hikes.

Considering how the Yen makes up 13.6% of the USDInd weight, this development may lend support the index.

2) Delayed US NFP report – Wednesday 11th Feb

Markets expect the US economy to have created 70,000 jobs in January with the unemployment rate to hold at 4.4%.

A stronger than expected report may shave Fed cut bets – boosting the dollar as a result.
A weaker than expected report could reinforce expectations around lower US rates, ultimately weighing on the dollar.

USDInd is forecast to move 0.6% up or 0.4% down in a 6-hour window after the NFP report.

3) US January CPI report – Friday 13th February

The incoming US Consumer Price Index (CPI) may influence monetary policy expectations.

Markets are forecasting:

CPI year-on-year (January 2026 vs. January 2025) to cool 2.5% from 2.7%.
Core CPI year-on-year to cool 2.5% from 2.6%.
CPI month-on-month (December 2025 vs January 2026) to remain unchanged at 0.3%.
Core CPI month-on-month to rise 0.3% from 0.2% in the prior month.

Signs of cooling inflationary pressure may support bets around the Fed cutting interest rates, weakening the dollar as a result.

Traders are currently pricing at a 25% chance of a Fed cut by March with this jumping to 50% by April.

Note: Speeches from Fed officials and other key data, including the US retail sales may impact the USDInd throughout the week.

USDInd is forecast to move 0.2% up or 0.6% down in a 6-hour window after the US CPI report.

4) Technical forces

FXTM’s USDInd remains in a wide range on the daily charts with prices approaching the 200-day SMA.

A strong breakout above 98.00 may open a path toward the 200-day SMA, 99.00 and 100.00.
Weakness below 98.00 may signal a decline back toward 96.50.

Week ahead