Dollar Falls to 4-Month Low, Gold Breaks $5,000
The US dollar continued to weaken on Monday (January 26), extending its sell-off to a third consecutive day, hitting its lowest level since September. Markets were rife with speculation that the US could coordinate with Japanese authorities to intervene to support the yen. Meanwhile, stocks were volatile, while gold broke through $5,000 per ounce.
The yen surged about 1% and hit its strongest level in two months, adding pressure on the dollar. S&P 500 futures were flat, while precious metals continued to rally: gold hit a new record and silver surged more than 6%.
FX volatility increased after signals emerged of allegedly coordinated rate checks between Tokyo and Washington. Traders interpreted this move as a prelude to direct intervention, especially after the yen fell to an 18-month low earlier this month. If the US and Japan act together, the effect could be even stronger in restraining speculators.
“The bigger issue is the signal of policy coordination,” said Daniel Baeza of Frontclear. He believes that if the market interprets this coordination as a readiness to accept a "looser" global dollar environment—especially if the Fed tends to be dovish—then short-term pressure on the dollar could continue.
In the bond market, Treasuries strengthened across all tenors as market participants increased bets on an interest rate cut in 2026. This sentiment was also influenced by increased attention to the Fed leadership succession issue, as BlackRock executive Rick Rieder's name has been increasingly mentioned as a candidate. An announcement on the next Fed chairman could even come as soon as this week, while Jerome Powell's latest policy decision is scheduled for Wednesday.
In recent trading, the Bloomberg Dollar Spot Index fell 0.3%. The euro rose 0.1% to $1.1844, the pound sterling was virtually unchanged at $1.3651, and the yen strengthened 1% to 154.18 per dollar.
Source: Newsmkar.id
