The U.S. dollar weakened sharply in late January 2026 as global markets shifted toward safe havens and rate-cut talk rose. Traders point to a presidential remark, growing speculation about lower interest rates, and strong demand for precious metals as key drivers.
The dollar fell from above 100 on the DXY index to about 95, marking roughly a 10% decline in 2025 (Ed. note: that was its worst year since 2017). Market commentary linked the move directly to changing expectations for U.S. monetary policy.
Trump publicly downplayed the currency’s slide, saying “The value of the dollar is great.” A related tweet highlighted how that comment appeared to accelerate the dollar’s fall.
Pressure for lower rates intensified after reports that the administration sought to replace Powell and push the Federal Reserve toward cuts, reducing demand for dollar assets. Lower expected yields make dollar-denominated investments relatively less attractive.
Investors also moved into precious metals, lifting prices for gold and silver as perceived safe havens. A related tweet argued that gold has overtaken U.S. Treasuries as the primary refuge for risk-off flows.
