Vosh's nomination boosts the US dollar index; US employment data provides guidance

On February 3, 2026, during the Asian trading session morning, the US Dollar Index slightly fluctuated around the 97.516 level, continuing the rebound trend from the previous trading day. Trading sentiment was relatively subdued, and the market was awaiting key economic data and central bank decisions to guide the direction. The previous trading day, the US Dollar Index closed at 97.609, with narrower intraday fluctuations. Earlier, influenced by the landing of the Fed chair nominee, the US Dollar Index experienced a brief rebound, rising a total of 0.8% from last Thursday to now, ending its decline since January.

The short-term rebound of the US Dollar Index was primarily driven by the news of Trump nominating Kevin. W. Wirth as Federal Reserve Chair. The market’s expectations for Wirth’s policy stance are hawkish, advocating a “rate cuts and balance sheet reduction” policy approach, along with emphasizing the Fed’s independence. This significantly alleviated previous concerns about politicization of the central bank, prompting funds to flow back into dollar assets. Institutions generally believe that Wirth’s nomination will help stabilize the dollar exchange rate, reduce the risk of further depreciation, and be positive for the dollar in the short term. Wedbush analysts pointed out that under Wirth’s leadership, the Fed might end the “bearish options” on the dollar, strengthen market discipline, and this shift would benefit dollar assets. However, the market remains rational about his hawkish stance. Evercore ISI emphasized that Wirth is a pragmatist, not a traditional ideological hawk, and excessive optimism about his hawkish expectations should be avoided.

From a technical perspective, the current US Dollar Index shows signs of a “short-term rebound momentum emerging, but the medium- to long-term downtrend remains unchanged.” On the daily chart, the Relative Strength Index (RSI) has entered oversold territory, providing a basis for a technical correction rebound, but no clear bottom divergence pattern has formed, limiting the rebound height. The MACD (Moving Average Convergence Divergence) bearish momentum histogram continues to be released, and the Bollinger Bands are widening, confirming the strength of the bearish trend. The price remains below short-term moving averages, with the moving average system in a standard bearish arrangement, and the pattern of lower highs and lower lows has not been broken. The short-term rebound is more of a technical correction after overselling rather than a trend reversal.

Market focus today will be on multiple key events and economic data, which will directly influence the subsequent rebound pace of the US Dollar Index. Two core variables deserve close attention. First, the Reserve Bank of Australia (RBA) interest rate decision. The market generally expects the RBA to raise interest rates by 25 basis points, from 3.60% to 3.85%, to curb inflation that is expected to re-emerge by the end of 2025. If the RBA announces a rate hike and signals a hawkish stance, the Australian dollar will strengthen, indirectly putting pressure on the US Dollar Index. Conversely, if the decision is dovish, it will further boost the dollar’s rebound momentum.

Second, the US December JOLTs job openings data, a labor market indicator highly watched by the Fed. Previously, the market expected this data to be around 8 million, but the latest forecast suggests it may fall short of expectations. If the final figure drops significantly, it will confirm signs of a slowing US labor market, weakening the basis for the Fed’s hawkish stance and negatively impacting the dollar. If the data remains resilient, it will reinforce the short-term rebound logic for the dollar. Additionally, FOMC voting member and Atlanta Fed President Bostic, along with Fed Board Member Bostic, will deliver speeches today. Their comments on market liquidity expectations will also be important catalysts for short-term fluctuations in the dollar.

Institutions’ outlook on the US Dollar Index shows a short-term bias toward strength but a medium- to long-term bias toward weakness. In the short term, the positive support from Wirth’s nomination and technical oversold correction will likely keep the dollar oscillating and rebounding. However, in the medium to long term, institutions like Pictet Asset Management still expect the dollar to weaken further, based on the potential slowdown in the US economy and marginal changes in global monetary policies. The current short-term rebound is unlikely to reverse the over 10% decline accumulated over the past year.

For intraday trading, the market will mainly adopt a wait-and-see approach, with the US Dollar Index likely fluctuating around the 97.5-97.7 range. Key focus should be on the policy tone of the RBA rate decision, the actual performance of the US JOLTs data, and policy signals from Fed officials. If multiple positive factors align, the dollar may attempt to test the 97.8 level. Conversely, if negative factors dominate, the dollar could fall back below 97.5 and consolidate sideways.