The U.S. dollar plunged to its lowest level since early 2022 on Tuesday as President Trump indicated he’s comfortable with the currency’s decline, triggering a broad-based selloff in the greenback while gold surged to fresh record highs and equities rallied on export competitiveness hopes.
Check out the forex news and economic updates you may have missed in the latest trading session!
Forex News Headlines & Data:
- Australia NAB Business Confidence for December 2025: 3.0 (2.0 forecast; 1.0 previous)
- China Industrial Profits (YTD) for December 2025: 0.6% y/y (0.3% y/y forecast; 0.1% y/y previous)
- New Zealand Credit Card Spending for December 2025: -0.3% y/y (4.7% y/y previous)
- France Consumer Confidence for January 2026: 90.0 (90.0 forecast; 90.0 previous)
- U.S. ADP Employment Change Weekly for January 3, 2026: 7.75k (8.0k previous)
- Canada Wholesale Sales Prel for December 2025: 2.1% m/m (0.4% m/m forecast; -1.8% m/m previous)
- U.S. S&P/Case-Shiller Home Price for November 2025: 0.0% m/m (-0.2% m/m forecast; -0.3% m/m previous); 1.4% y/y (1.2% y/y forecast; 1.3% y/y previous)
- U.S. House Price Index for November 2025: 0.6% m/m (0.3% m/m forecast; 0.4% m/m previous); 1.9% y/y (1.0% y/y forecast; 1.7% y/y previous)
- U.S. Richmond Fed Manufacturing Index for January 2026: -6.0 (-3.0 forecast; -7.0 previous)
- CB U.S. Consumer Confidence for January 2026: 84.5 (88.0 forecast; 89.1 previous)
- Dallas Fed Services Index for January 2026: 2.7 (2.0 forecast; -3.3 previous)
- U.S. Money Supply for December 2025: 22.4 (22.3 previous)
- U.S. API Crude Oil Stock Change for January 23, 2026: -0.25M (3.04M previous)
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Tuesday’s session delivered a dramatic repricing of the U.S. dollar following President Trump’s lack of concern for currency weakness, sending the greenback to its lowest level since February 2022 and triggering significant moves across asset classes as traders interpreted his comments as a green light to sell dollars.
Gold emerged as the session’s standout performer, surging 3.43% to close around $5,181 per ounce and establishing fresh all-time highs. The precious metal’s rally appeared to reflect multiple dynamics, including its inverse relationship with the dollar, safe-haven demand amid concerns about unpredictable U.S. policy, and positioning in what market participants are calling the “debasement trade” as investors seek alternatives to dollar-denominated assets. The move extended gold’s remarkable run as the metal benefits from both geopolitical uncertainty and questions about U.S. fiscal sustainability.
WTI crude oil rallied 2.79% to settle near $62.30 per barrel, with the advance likely correlating with the dollar’s weakness making dollar-denominated commodities more attractive to international buyers. The oil market appeared to shrug off demand concerns, instead focusing on the currency tailwind that a weaker dollar provides to commodity prices broadly.
Bitcoin posted a solid gain of 1.20% to trade around $89,030, likely benefiting from U.S. dollar weakness and policy uncertainty. The cryptocurrency’s advance may have appeared to reflect a return to its appeal as a hedge against traditional currency debasement, though the magnitude of its move was more modest compared to gold’s dramatic surge.
U.S. equities rallied, with the S&P 500 climbing 0.54% to close at a fresh all-time high around 6,984. The advance likely reflected optimism about export competitiveness for U.S. multinationals under a weaker dollar regime, though technology shares led the gains as the sector appeared to benefit from both the currency move and anticipation of strong earnings reports due later in the week from Microsoft, Meta, and Tesla on Wednesday, followed by Apple on Thursday.
Treasury yields rose 0.71% on the 10-year note to settle around 4.20%, with the increase possibly reflecting concerns about foreign demand for U.S. debt in an environment where the administration appears comfortable with dollar depreciation. The move stood in contrast to what might typically be expected during dollar weakness, suggesting bond market participants may be pricing in risks around U.S. fiscal policy and the potential for diminished reserve currency status.
The day’s economic data painted a mixed picture of the U.S. economy. Consumer Confidence tumbled to 84.5 from 89.1, missing the 88.0 forecast and marking a notable deterioration in household sentiment. The November House Price Index beat expectations significantly at 0.6% month-over-month versus 0.3% expected, while the S&P/Case-Shiller index came in flat at 0.0% versus expectations for a decline. Regional Fed surveys showed continued manufacturing weakness, with the Richmond Fed Manufacturing Index at -6.0 and services showing modest improvement.
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FX Market Behavior: U.S. Dollar vs. Majors
Overlay of USD vs. Majors Forex Chart by TradingView
The U.S. dollar experienced a dramatic selloff on Tuesday, posting its worst single-day performance in months following President Trump’s explicit comments endorsing dollar weakness, with the greenback closing as the worst-performing major currency against all counterparts.
During the Asian session, the dollar traded choppy and sideways with a net bullish lean and low volatility. With no major economic catalysts during Asian hours, the dollar’s modest strength likely reflected positioning ahead of the day’s U.S. data releases, including the Consumer Confidence report and housing market figures. Currency pairs showed limited directional conviction as traders awaited clearer catalysts.
The London session brought the first signs of dollar pressure, with the greenback turning net lower against major currencies during morning European hours and persisting lower through the end of the day. The initial weakness may have reflected early reports or anticipation of Trump’s comments, though the real acceleration came during U.S. afternoon hours. European currencies showed relative strength despite no major regional economic catalysts, suggesting the move was dollar-driven rather than euro or sterling-specific.
The U.S. session delivered the knockout blow for the dollar, with Trump’s Iowa comments around midday Eastern time triggering an intensification of selling pressure. When asked if he was concerned about the dollar’s weakness, Trump responded “No, I think it’s great,” adding that “the dollar’s doing great” and suggesting he could make it move “like a yo-yo.” The comments were widely interpreted by currency strategists as providing explicit permission for further dollar sales, with analysts noting that the administration appears to favor a weaker dollar to boost U.S. export competitiveness.
At Tuesday’s close, the dollar posted sharp losses against all major currencies. The Swiss franc showed the strongest relative performance, with USD/CHF declining 1.80%, followed by the euro with USD/EUR down 1.31%, sterling with USD/GBP falling 1.06%, the Canadian dollar with USD/CAD down 0.92%, and the New Zealand dollar with USD/NZD declining 0.72%. The moves reflected broad-based dollar weakness rather than strength in specific currencies, with even the typically dovish yen and Australian dollar posting significant gains against the greenback.
Upcoming Potential Catalysts on the Economic Calendar
- Australia Inflation Rate for December 2025 at 12:30 am GMT
- Germany GfK Consumer Confidence for February 2026 at 7:00 am GMT
- Swiss Economic Sentiment Index for January 2026 at 9:00 am GMT
- Euro area ECB Elderson Speech at 10:00 am GMT
- U.S. MBA Mortgage Rate & Applications for January 23, 2026 at 12:00 pm GMT
-
Bank of Canada Interest Rate Decision for January 28, 2026 at 2:45 pm GMT
- Bank of Canada Press Conference at 3:30 pm GMT
- EIA Crude Oil Stocks Change for January 23, 2026 at 3:30 pm GMT
- ECB Schnabel Speech at 6:00 pm GMT
-
Federal Funds Rate for January 28, 2026 at 7:00 pm GMT
- Fed Press Conference at 7:30 pm GMT
Wednesday’s calendar is dominated by the Federal Reserve’s policy decision at 7:00 pm GMT, with markets universally expecting the central bank to hold rates steady following three cuts delivered in 2025. The key focus will be on Chair Powell’s 7:30 pm GMT press conference, where traders will parse his language for any reaction to the dollar’s recent weakness and Trump’s comments about currency policy. The Fed faces a delicate communication challenge, needing to maintain policy independence while avoiding direct confrontation with an administration that has made clear its preference for dollar depreciation.
The Bank of Canada’s decision at 2:45 pm GMT arrives amid questions about how the administration’s trade and currency rhetoric might affect Canadian economic prospects, with the loonie having shown relative resilience despite broader dollar weakness. Wednesday’s MBA mortgage data and EIA crude inventory figures could provide additional market-moving catalysts, particularly if they reinforce themes around housing market resilience or energy market dynamics in the context of currency volatility.
Markets remain highly sensitive to any further commentary from U.S. officials on currency policy, with traders watching for whether Trump’s remarks represent a durable shift in administration priorities or tactical positioning ahead of trade negotiations with major partners including China and the European Union.
