Euro Rebounds, Dollar Slumps on Fed Drama
EUR/USD strengthened and traded around 1.1690 on Monday, up around 0.4% after bouncing from the 1.1620 area (a one-month low).
Support for the euro came from improving Eurozone sentiment: the Sentix Investor Confidence index rose to -1.8 in January from -6.2 in December (better than expected). At the same time, the dollar weakened as markets became nervous after Fed Chair Jerome Powell revealed the DOJ issued a subpoena and threatened criminal action regarding his testimony regarding the Fed building renovation—an issue that has rekindled concerns about the central bank's independence.
Geopolitical factors also contributed to the market's defensive stance, after escalating violence in Iran added pressure on global risk sentiment.
Looking ahead, market attention turns to a speech by Raphael Bostic (Atlanta Fed) scheduled for today, as well as the release of the US CPI (December 2025) on Tuesday, January 13, 2026, which could potentially shift interest rate expectations.
Source: Newsmaker.id