Finance
Dollar slips across the board as intervention risk lifts yen
Published by Global Banking & Finance Review®
Posted on January 27, 2026
4 min readLast updated: January 28, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 27, 2026
4 min readLast updated: January 28, 2026
Yen gains and intervention risks keep the dollar in check, impacting global currency markets. Traders watch for coordinated actions by U.S. and Japan.
(Refiles Jan. 27 report to clarify analyst comment in paragraph 17 on possible U.S. involvement in yen intervention)
By Saqib Iqbal Ahmed and Sophie Kiderlin
NEW YORK, Jan 27 (Reuters) - The U.S. dollar fell for a fourth straight day on Tuesday, slipping to a four-month low, as traders kept watch for possible coordinated currency intervention by U.S. and Japanese authorities and a Federal Reserve interest rate decision.
The dollar has been under intense pressure this month from factors including U.S. President Donald Trump's policymaking and concerns about Federal Reserve independence.
In addition, disagreement between Republicans and Democrats over funding for the Department of Homeland Security after the fatal shooting of a second U.S. citizen by federal immigration officers in Minnesota, has raised concerns of another U.S. government shutdown.
Meanwhile, Trump accused South Korea's legislature of "not living up" to its trade deal with Washington, and he said late on Monday he would increase tariffs on imports from Asia's fourth-biggest economy into the U.S. such as autos, lumber and pharma to 25%.
Trump has also in recent days said he would impose a 100% tariff on Canada if it follows through on a trade deal with China.
'TARIFF MAN' SHOWS NO SIGN OF REGRETS
The Korean won strengthened 0.45% against the dollar to 1,439.14 per dollar.
"With the 'tariff man' showing no sign of repentance and the U.S. government headed into another shutdown, economic policy uncertainty is soaring once again, leading to an intensification in the ‘Sell America’ trade that has dominated markets for the better part of a year," Karl Schamotta, chief market strategist with payments company Corpay in Toronto, said.
"Positive fundamentals should eventually reassert themselves, but for now, no one is willing to catch the falling chainsaw that is the U.S. dollar," he said.
Against a basket of currencies, the dollar fell 0.48% to 96.64, hovering near September's 3-1/2-year low, and down from an earlier high of 97.287, in volatile trading.
Investors will watch the Fed's two-day meeting this week for clues to the path of monetary policy.
"The big risk, as we see it, is not in the rate decision. We're pretty confident that the Fed is going to hold rates unchanged. But Trump is not going to like that," said Nick Rees, head of macro research at Monex.
Trump could announce his candidate for Chair Jerome Powell's successor soon after the rate decision, especially if the president does not support the central bank's decision, Rees said.
YEN INTERVENTION WATCH
Much of the foreign exchange market's focus has also been on the yen, which has rallied by as much as 3% over the last two sessions on talk of the U.S. and Japan conducting rate checks - often seen as a precursor to official intervention.
That has helped the yen slip below 153 to the dollar. It was last trading at 152.96.
Parisha Saimbi, EM Asia FX and local markets strategist at BNP Paribas, said possible U.S. involvement suggests that there may be "multiple parties" prepared to intervene, which is different from previous intervention episodes in recent years.
While there has been no confirmation of rate checks from officials in Japan or the U.S., a person familiar with the matter told Reuters that the New York Federal Reserve had checked dollar/yen rates with dealers on Friday.
Japanese authorities said on Monday they have been in close coordination with the U.S. on foreign exchange.
The euro was last 0.7% higher at $1.19635, trading around levels last seen in June 2021. Similarly, sterling added 0.8% to $1.3786, its strongest since October 2021.
The Australian dollar rallied 0.8% to $0.69705, its highest since February 2023.
(Reporting by Sophie Kiderlin in London and Rae Wee in Singapore, additional reporting by Amanda Cooper in London; Editing by Timothy Heritage, Aidan Lewis and Barbara Lewis)
Foreign exchange, or forex, is the global market for trading national currencies against one another. It is the largest financial market in the world, facilitating currency conversion for international trade and investment.
Currency intervention occurs when a country's central bank buys or sells its own currency in the foreign exchange market to influence its value. This is often done to stabilize or increase the competitiveness of a nation's economy.
The Federal Reserve, often referred to as the Fed, is the central banking system of the United States. It regulates the U.S. monetary and financial system, aiming to promote maximum employment and stable prices.
Economic growth refers to an increase in the production of goods and services in an economy over a period of time, typically measured by the rise in Gross Domestic Product (GDP).
Financial stability is a condition where the financial system operates effectively, with institutions able to withstand economic shocks, ensuring confidence in the financial markets and the economy.
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