On Wednesday, February 12th, data released by the U.S. Bureau of Labor Statistics showed that non-farm payrolls increased by 130,000 in January. This figure significantly surpassed market expectations of 65,000 and marked the largest gain since April 2025. The unemployment rate unexpectedly edged down to 4.3%, compared to expectations and the previous reading of 4.4%. Average hourly earnings rose 0.4% month-on-month, exceeding the forecast of 0.3% and the downwardly revised prior figure of 0.1%. The labor force participation rate slightly increased to 62.5%, performing marginally better than anticipated. However, the report also included a substantial downward revision to the total employment growth for 2025, adjusted sharply from an initially reported 584,000 to 181,000. This significant benchmark revision indicates that the actual weakness in last year's labor market was far greater than previously understood. Following the data release, traders scaled back bets on Federal Reserve interest rate cuts, fully pricing in the next rate cut for July instead of June.

Separately, a wage tracker released by the European Central Bank on Wednesday indicated that wage growth in the euro area is expected to accelerate in the second half of the year. This supports the central bank's view that interest rates can remain stable. The data projected compensation to increase by 2.7% year-on-year in the fourth quarter of this year, up from 2.6% in the third quarter. Although this growth rate is well below the peak of over 5% seen in 2024, it remains stronger than forecasts for the first half of the year. The European Central Bank stated, "The rise in the wage path during the year is linked to the gradual dissipation of mechanical downward effects from large one-off payments made in 2024 but not in 2025. These mechanical effects are expected to largely disappear during 2026."

Data to be watched today include the UK December GDP monthly rate, UK December industrial production monthly rate, UK December goods trade balance, the UK Q4 preliminary GDP annualized rate, US initial jobless claims for the week ending February 7th, and US January existing home sales annualized total.

**USD Index** The US Dollar Index experienced consolidation with a slight gain on Wednesday. The index is currently trading around 96.90. Support stemmed partly from short-covering, but the primary driver was the unexpectedly strong US non-farm payrolls report, which cooled expectations for Federal Reserve rate cuts. However, dovish comments from Fed officials limited the index's upward momentum. Resistance is noted near 97.50 today, with support around 96.50.

**EUR/USD** The Euro declined against the US Dollar on Wednesday, recording a minor loss. The pair is currently trading near 1.1880. The main pressure came from a stronger US Dollar, which appreciated following the robust non-farm payrolls report that reduced expectations for Fed easing. Nonetheless, positive economic data from the eurozone and expectations that the European Central Bank is nearing the end of its rate-cutting cycle limited the pair's losses. Resistance is seen near 1.1950 today, with support around 1.1800.

**GBP/USD** The British Pound moved lower against the US Dollar on Wednesday, closing with a slight decrease. The pair is currently trading around 1.3630. Selling pressure emerged near the technical resistance level of 1.3700. Furthermore, the US Dollar's strength, fueled by the strong jobs data reducing Fed cut bets, weighed on the pair. Additional pressure came from concerns regarding political uncertainty in the United Kingdom. Resistance is anticipated near 1.3700 today, with support around 1.3550.