The US Dollar held near 97 in the American session on Thursday after Wall Street fell on AI-related concerns. The US Dollar Index (DXY) traded near 96.90, firmer but waiting for the US January CPI release on Friday.
A Bloomberg report said Russia intends to return to US dollar settlement, with possible cooperation in oil and natural gas, critical raw materials, and nuclear energy. Any move would require the US to lift sanctions and restore Russia’s access to the US dollar.
Us Labor Data In Focus
US initial jobless claims fell to 227K in the week ending February 7. This was above the 222K forecast but below the revised 232K from the prior week, according to the US Department of Labor.
GBP/USD was near 1.3620 after the jobless claims data. EUR/USD traded around 1.1860 ahead of the Eurozone flash GDP (Q4) due Friday.
USD/JPY traded near 152.80, falling for a fourth day amid Japan’s election outcome and intervention concerns. AUD/USD was around 0.7080 after reaching a three-year high earlier in the day, while gold traded near $4,913 after a three-day low.
Friday’s docket includes RBNZ inflation expectations (Q1), Swiss January CPI, Eurozone flash GDP (Q4), and US January CPI. Weekend events include speeches by ECB President Christine Lagarde on Saturday 14 and Sunday 15, plus Japan’s Q4 preliminary GDP on Sunday 15.
Perspective From Last Year
Looking back to this time last year, we saw the US Dollar facing uncertainty around the 97 level amid tech sector jitters and geopolitical rumors. Those rumors of Russia returning to the dollar system never materialized, and the market’s focus has since returned to central bank policy. Now, with the Dollar Index firm above 104, the strategy is to trade based on interest rate differentials, not fleeting headlines.
Last year, we were anxiously awaiting the January 2025 CPI data to gauge the Federal Reserve’s path. Today, we see that inflation remained stubborn through 2025, and the latest figures for January 2026 show headline CPI at a persistent 2.9%, keeping the Fed from committing to rate cuts. This suggests traders should consider positions that benefit from a “higher for longer” interest rate environment, such as buying puts on interest rate futures.
The “AI-related fears” of early 2025 led to a market correction that proved to be a significant buying opportunity for those with a long-term view. Recent industry data confirms the sector’s strength, with global AI investment in the last quarter of 2025 alone exceeding $50 billion. This indicates that buying long-dated call options on major tech indices remains a viable strategy to capture continued upside.
We remember the intense speculation around Japanese intervention when USD/JPY was near 152.80 in February 2025. While authorities did step in later that year, the pair is now testing the 158 level, suggesting that underlying monetary policy divergence is a more powerful force. This creates a tense environment where traders can use options to bet on either another sharp intervention-driven drop or a continued grind higher.
Gold’s brief spike near $4,900 an ounce last year reflected a moment of extreme market fear. It has since stabilized in the $2,500-$2,600 range, supported by consistent central bank purchases, which saw a net increase of over 800 tonnes globally in 2025. This solid floor suggests that selling put options on gold could be an effective way to generate income while hedging against renewed volatility.
