Canadian Dollar Faces Pressure as Fed-BoC Policy Gap Widens 
Asian Currencies Mixed as Dollar Holds Near Two-Month High 
Dollar Falls as Oil Eases, Yen Jumps on Intervention Signals 
U.S. Treasury Yields Surge as 30-Year Hits 22-Year High 
US Stock Futures Fall as Treasury Yields Surge Ahead of Trump-Xi Summit 
Australia Unemployment Hits Five-Year High Despite Strong Jobs Growth 
Japanese Bank Stocks Surge as Bond Yields Fuel Rate Hike Bets 
Soybean Futures Slip as Traders Await Trump-Xi Trade Signals 
Oil Prices Ease as Iran Tensions Clash With Diplomacy Hopes 
Japan Private-Sector Growth Slows as Domestic Demand Weakens 
Fed Unveils Stablecoin Rules Under GENIUS Act 
RBI Uses $10 Billion Currency Swaps to Drain Excess Rupee Liquidity 
Trump, Xi Focus on Trade and AI at White House Summit 
Wall Street Ends Flat as Oil, Treasury Yields and Fed Jitters Rattle Markets 
European Stocks Fall as Bond Yields and Geopolitical Risks Weigh 
Dollar Holds Near Two-Month High as Yen Approaches 160 
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The U.S. dollar began 2026 on a soft note, extending the weakness it showed throughout much of 2025, as currency markets continue to adjust to narrowing interest rate differentials between the United States and other major economies. Investors remain cautious ahead of key economic data and central bank developments that could shape the outlook for global interest rates this year.
After posting its sharpest annual decline in eight years in 2025, the dollar index hovered near 98.24 in early Asian trading. Last year’s drop was driven by U.S. interest rate cuts, uncertainty surrounding trade policy, and growing concerns about the Federal Reserve’s independence. As these factors persist into 2026, pressure on the greenback remains evident.
The euro held steady around $1.1752 after surging 13.5% in 2025, its strongest yearly gain since 2017. Sterling also remained firm near $1.3474, following a 7.7% rise last year. Both currencies benefited from improving sentiment outside the United States and the fading pace of rate cuts by other central banks, which reduced the dollar’s yield advantage.
The Japanese yen stabilized near 156.74 per dollar, close to a 10-month low that previously triggered intervention concerns from Japanese authorities. Although verbal warnings from Tokyo helped ease fears late last year, traders remain alert, especially as upcoming economic data could influence the Bank of Japan’s policy direction. With markets in Japan and China closed, trading volumes in Asia were subdued.
Looking ahead, investors are closely watching U.S. labour market data, including payrolls and jobless claims, for signals on where interest rates may head in 2026. Attention is also focused on who President Donald Trump will nominate as the next Federal Reserve Chair when Jerome Powell’s term ends in May. Markets expect a more dovish stance, with traders currently pricing in two U.S. rate cuts this year.
Meanwhile, commodity-linked currencies showed resilience. The Australian dollar edged higher near $0.6680 after its strongest annual performance since 2020, while the New Zealand dollar held steady around $0.5755, snapping a three-year losing streak in 2025.
