Fed wary of acceleration in wages ahead of US CPI report

Matthew Ryan, CFA Ebury

The Dollar received a mild boost on Wednesday from what was a thoroughly impressive January payrolls report.

The 130k net jobs added marks the fastest pace of growth in the labour force since April 2025, lifting the 3-month average to +73k, which is plenty strong enough to exceed the pace of growth in the labour force.

“The surprise drop in the unemployment rate (that fell to 4.3%) suggests that layoffs also remain very low and is consistent with the more timely jobless claims figures.

The Fed will also no doubt be wary of the acceleration in wages, given its inflationary implications, which were up 0.4% on the month. The data should take pressure off the FOMC from cutting rates at upcoming meetings, with a pause in both March and April now looking a very safe bet.

Yet, the reaction in the greenback was relatively contained, partly due to the sizeable (albeit far from totally unexpected) downwards revisions to the 2025 NFP figures, which were slashed by a whopping 403k to a monthly pace of just +15k (from 49k) - i.e. consistent with an economy that is barely adding jobs, despite low levels of layoffs. Focus will now turn squarely to this afternoon’s US CPI report.

Author

Matthew Ryan, CFA

Ebury

Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.

EUR/USD shifts its attention to 1.1900 and above

EUR/USD has shaken off Tuesday’s dip, pushing back beyond the 1.1800 mark amid decent gains as Wednesday’s session draws to a close. The rebound is largely driven by a modest pullback in the US Dollar, as markets digest the aftermath of President Trump’s SOTU speech and continue to monitor trade-related headlines and signals from the White House.

GBP/USD challenges multi-day highs near 1.3530

GBP/USD leaves behind the previous day’s decline and regains fresh upside traction on Wednesday, surpassing the 1.3500 barrier in a context of a modest decline in the Greenback and a generalised improved mood in the risk-linked space. Meanwhile, the US tariff narrative continues to dictate the mood among market participants after Presidet Trump’s SOTU speech failed to surprise markets.

Gold remains bid and close to $5,200

Gold buyers are returning to the fold on Wednesday, targeting the $5,200 area and possibly beyond, after Tuesday’s corrective dip from monthly highs. The rebound in the precious metal comes as the US Dollar loses traction, with Trump’s SOTU speech offering little fresh direction and AI-related nerves continuing to ease.

UK financial watchdog advances stablecoin oversight as four firms pilot issuance

The Financial Conduct Authority (FCA) in the United Kingdom (UK) is advancing toward the final stablecoin regulatory framework with a pilot program involving four companies, including Monee, Financial Technologies ReStabilise, Revolut and VVTX.

Nvidia earnings to influence AI trade and broader market sentiment

For the last three years, Nvidia has been the engine of the AI boom, and now Wall Street is watching to see whether that momentum can keep going. High-growth stocks have been struggling to maintain their bullish trend in 2026.

Cosmos Hub Price Forecast: ATOM rebounds slightly, bearish outlook remains intact

Cosmos Hub (ATOM) price rebounds, trading above $2.05 at the time of writing on Wednesday, after undergoing a sharp correction since last week. Weakening on-chain and derivatives data support a bearish outlook, while technical analysis remains unfavorable.