The dollar index slipped to around 96.8 on Thursday after facing heightened volatility in the previous session, struggling to gain traction even as stronger-than-expected jobs data lowered the odds for near-term Federal Reserve interest rate cuts. The greenback also remained under pressure from the rallying yen amid renewed verbal interventions from Japanese authorities and optimism that Prime Minister Sanae Takaichi’s expansionary fiscal policies will bolster domestic growth. Data on Wednesday showed US payrolls rose by 130,000 in January, the biggest gain in more than a year, while the unemployment rate unexpectedly fell to 4.3%, signalling a stabilizing labor market at the start of 2026. The robust data pushed Treasury yields higher and reinforced Fed officials’ inclination to keep rates on hold for now, with markets now anticipating the next rate cut to come in July instead of June.