US FX WRAP: NFP headline beat fails to give USD a sustained move higher; JPY outperforms

Analysis details (20:40)

USD was mixed on Wednesday, failing to broadly capitalise on the stronger-than-expected NFP reading in January. On the surface, metrics were encouraging, headline printed 130k (exp. 70k), the unemployment rate ticked lower to 4.3% from 4.4% alongside an uptick in the participation rate. That said, private employment was behind most of the growth driving the headline, +172k (exp. 70k), to which Oxford Economics thinks it won't be sustained. Additionally, the final annual BLS benchmark payroll revisions through to March 2025, which saw total jobs revised down by 862k, (prelim 911k, and vs exp. 825k). Signalling that employment in retail, construction, manufacturing, tech, and financial services is being lost. Thereafter, we heard from Fed's Schmid (2028 voter), who believes the breakeven employment rate is 40-50k. DXY finished the day flat with the first full 25bps Fed rate cut pushed back to July from June.

G10FX strength was led by JPY and AUD, while CHF was at the bottom of the pile. Today's NFP figures seemingly dented the short-term case for new yearly CHF highs as US markets price in rates higher for longer. Meanwhile, JPY, which alongside many other G10 FX initially weakened on NFP, bounced back, in this case, paring all weakness seen. Note, a sharp bout of USD/JPY selling was seen over that time, once again eliciting speculation over MoF action. However, circumstances deem intervention here unlikely, given the ministry typically intervenes in environments that strengthen the JPY, like soft US data; additionally, Japan remains on holiday. USD/JPY traded between 152.55-154.65.

USD/CAD finished firmer but had pared the NFP-induced strength. Keeping the currency pair higher was a Bloomberg report, US President Trump is considering exiting the North American trade pact, asking his aides why he shouldn’t withdraw from the agreement. USD/CAD hit highs of 1.3619 before paring to around 1.3570. Elsewhere, AUD/USD erased all NFP-USD strength. supported by earlier comments from RBA Deputy Governor Hauser, "Economy is not just 'dig it and ship it', many parts of the economy are doing quite well".

11 Feb 2026 - 20:40- ForexUS Research- Source: Newsquawk