Finance
Morning Bid: Trump's talk downs the dollar
Published by Global Banking & Finance Review®
Posted on January 28, 2026
2 min readLast updated: January 28, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 28, 2026
2 min readLast updated: January 28, 2026
Trump's remarks caused a dollar decline, boosting the euro and gold prices. Investors are hedging against dollar risks amid geopolitical tensions.
A look at the day ahead in European and global markets from Tom Westbrook
Sometimes markets do listen to Donald Trump. After a long, grinding decline in foreign exchange volatility, the currency market has been lit up by a wave of dollar selling.
When Trump sounded nonchalant about it, telling a reporter that the dollar was "doing great," selling turned into a rout that sent the euro over $1.20 for the first time in more than 4-1/2 years and the Swiss franc to a 10-year top.
There's a modest rebound underway, but the risk of dollar exposure in the Trump era is growing ever clearer.
Geopolitics, Trump's policies, Washington wanting a lower exchange rate and worries over Fed independence all helped drag the dollar index down more than 9% last year.
And now with fresh nerves about his unsettling Greenland diplomacy, as well as hints the U.S. is willing to act with dollar selling to help Japan boost its yen -- investors want to hedge.
As TD Securities analyst Prashant Newnaha put it -- imagine holding Treasuries at 4%, but losing 10% on the dollar as a foreign investor.
Reuters reported last week that Australia's second-biggest pension fund, Australian Retirement Trust, is reducing dollar exposure through hedging, while hanging on to its U.S. investments. That sort of view helps explain how stocks have marched on to record peaks despite the swings in FX.
The falling dollar helped gold to a new high above $5,200 an ounce and has lifted the Australian dollar over 70 cents.
Rates are giving the Aussie an extra boost and after data on Wednesday showed hotter-than-expected underlying inflation in December, markets put the chance of a rate hike next week at more than 70%.
All of Australia's "Big Four" banks now forecast a hike.
Central banks in the U.S. and Canada are seen keeping rates on hold later on Wednesday, leaving the focus on how Fed Chair Jerome Powell handles questions on the central bank's independence.
Earnings are due for Meta and Tesla after U.S. markets close.
Key developments that could influence markets on Wednesday:
- U.S. Federal Reserve meeting
- Bank of Canada meeting
- After-market earnings at Meta and Tesla
(Editing by Jacqueline Wong)
Foreign currency refers to any currency that is not the domestic currency of a country. It is used in international trade and investment.
The dollar index measures the value of the United States dollar against a basket of foreign currencies. It reflects the dollar's strength in the global market.
Currency hedging is a strategy used by investors and companies to protect against fluctuations in exchange rates, minimizing potential losses.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
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