← Back to posts🧠Dollar doubts, record gold and intervention chatter drive FX

🧠Dollar doubts, record gold and intervention chatter drive FX

Published: 1/28/2026

Good morning traders from a fog-wrapped IntelliTrade desk, where visibility is low outside, but the moves in gold and the dollar could not be clearer. It is about 4°C, there is a yellow fog warning in place, and this morning’s job is to see through the macro haze a bit faster than everyone else.


Overall Market Sentiment



Markets are in a cautiously risk-on, dollar-off mood. The US Dollar Index has slumped to a four year low around 95.5–96.0 after President Trump openly welcomed the weaker dollar, and although there is a small bounce this morning, the greenback is still down more than 2 percent so far this month.


Gold has smashed through 5,200 dollars and is trading around 5,230–5,260, up more than 20 percent year to date, while global equities are grinding higher, with the S&P 500 again testing record territory near the 6,980 area as investors look through politics toward earnings and tonight’s Fed decision.





Geopolitics and policy



The immediate geopolitical heat has cooled slightly, but policy risk is front and centre. Trump’s comments that the dollar’s slide is “great” for US business have been taken as an informal green light to sell USD, especially when combined with existing unease over trade and fiscal policy.


At the same time, markets are nervously watching yen intervention chatter. Reports of “rate checks” and the possibility of joint US–Japan action have pushed USDJPY down toward 152–153, with some feeds showing prints around 152.3 in Asian trading before a modest rebound. That has turned the pair from a one way carry engine into a key volatility hotspot and has helped redirect haven demand into both JPY and gold.


Against that backdrop, tonight’s FOMC meeting is the main macro event. The Fed is widely expected to hold the funds rate at about 3.5–3.75 percent, with no new projections, so the focus is squarely on Powell’s tone: how he characterises growth, inflation and the dollar slide, and how he navigates questions about political pressure and future nominations.


Oil is relatively calm in comparison. Brent sits around 65–66 dollars and WTI near 60–61, supported by lingering Middle East risk but capped by solid supply, which means energy is an important but not dominant part of the inflation story this week.





Today and the rest of the week



Today, Wednesday 28 January


  • FOMC decision and Powell press conference in the US evening. No rate move is expected, so markets will key off any hint on the pace and timing of cuts later in 2026 and any reaction to the weaker dollar and record gold.
  • Ongoing price discovery in gold and USDJPY as traders decide whether to lean further into the “Sell America” and intervention themes or lock in profits ahead of the Fed.



Thursday–Friday


  • US data after the Fed, including jobless claims and growth related indicators, will start to test whether the soft-landing narrative still holds after such a strong run in risk assets.
  • In Europe, German and Eurozone numbers at the end of the week (GDP, inflation and confidence) will shape how sustainable the recent EUR rally looks now that EURUSD has traded near 1.20 for the first time since 2021.
  • In the Antipodes, markets will continue to digest Australian CPI and its implications for the RBA, and how that spills over into AUD and NZD after very strong runs.






Currency outlooks




🔻 USD – Weak ahead of the Fed, with credibility under scrutiny



The dollar is on the back foot. DXY has broken key support and traded as low as about 95.6 before stabilising closer to the 96 handle, a four year low, as Trump’s remarks were read as tolerance for further dollar weakness.


Under the surface, the macro picture still looks solid: recent data point to growth running around 4 percent annualised with core inflation near the high 2s, which is consistent with a Fed that is happy to stay on hold this week and only slowly consider cuts as the year progresses.The problem for the dollar is less about hard data and more about institutional and policy confidence, especially when Fed independence is a topic and when investors have alternative havens in gold, CHF and JPY that are currently working.


Near term, risks remain tilted toward additional USD softness if the Fed delivers a cautious, data dependent message and avoids talking up the currency. A firmer dollar would likely require either a clearly hawkish surprise from Powell or a sharp risk off turn that lifts demand for cash rather than for metals and non dollar havens.





🔺 EUR – Benefiting from dollar slide, watching German data and Fed tone



EURUSD has surged into the 1.20 area, briefly touching around 1.208 in earlier trade and now sitting just under 1.20 after a modest pullback as the dollar stabilises. That marks a five year high and reflects a powerful combination of dollar selling, fading tariff risk and improving sentiment toward the Eurozone.


Growth in the currency bloc is still modest, but the worst stagnation fears have eased, and the ECB is seen moving more slowly on cuts than the Fed, which narrows the interest rate gap even though Bund yields remain significantly below US Treasuries.For this week, German and wider Eurozone data at the end of the week will be important in judging whether this euro strength is backed by fundamentals or mainly by dollar weakness.


In the short run, risks for EUR versus USD look modestly tilted to the upside, though from already stretched levels: a dovish sounding Fed and still strong gold would support the single currency, while any reassertion of US yield advantage or disappointing Eurozone data could trigger a healthy correction lower.


Reference areas: roughly 1.19 as first support and the 1.21–1.22 region as the next resistance zone that would signal a more extended euro regime if broken.





🔺 GBP – High and stretched, but still riding the weak USD wave



GBPUSD is trading in the 1.37–1.38 region, near a four year peak, after a strong month driven by the dollar slide and better than expected UK data earlier in January.


The BoE is seen as cautious but not in a hurry to cut, given still firm wage and services inflation, which keeps UK front end yields relatively attractive compared with parts of Europe. At the same time, positioning is extended and recent notes highlight that the move above 1.37 has already met the initial upside objectives many desks had for January.


For the rest of the week, risks for GBP versus USD remain slightly tilted to continued strength, as long as the Fed does not aggressively push back and global risk appetite remains constructive. However, with the pair already near the top of the 1.36–1.38 band highlighted by several technical roadmaps, the scope for further gains without consolidation is more limited.


Reference areas: around 1.36 as near support and 1.38–1.40 as the resistance region markets are watching into and after the Fed.





⚖️ CAD – Firm but still tethered to oil and Fed outcome



USDCAD is holding in the 1.36–1.37 area, close to the lowest levels of the past six months, as a weak USD and steady oil support the loonie. Wise and other trackers show the US dollar worth about 1.36 Canadian dollars at today’s lows, underscoring how far the pair has retreated from the 1.41 region late last year.


Domestic data have been respectable, with retail sales surprising to the upside recently and inflation around the mid 2 percent area, which keeps the Bank of Canada on a broadly neutral path for now. Oil in the mid 60s is a tailwind but not a game changer.


Into and after the Fed, CAD risks versus USD look broadly balanced. A dovish Fed and continued equity strength would support further mild CAD outperformance, whereas a hawkish surprise or a risk off wobble could see USDCAD back toward 1.38 without damaging the broader medium term trend.


Reference areas:1.36 as near support and 1.39–1.40 as the wider resistance band that has capped the pair in recent months.





🔺 CHF – Near records as markets hunt for “quiet” havens



The Swiss franc is sitting near multi year highs. Sources tracking CHF show USDCHF around 0.76–0.77, its lowest area in many years, while EURCHF trades near 0.917–0.918, close to the weakest euro levels against the franc in the last six months.


With Swiss inflation still extremely low and the SNB policy rate near zero, a stronger franc is a manageable side effect of global uncertainty and provides a buffer against imported price shocks. From an investor perspective, CHF offers institutional stability and limited political drama, which is particularly attractive at a time when gold and the yen are moving on overt policy noise.


Short term, risks continue to lean toward gradual CHF outperformance, especially versus higher beta currencies and versus USD, even if the pace may slow if the Fed gently leans against extreme dollar weakness in its communication.


Reference areas: roughly 0.76–0.78 in USDCHF and 0.91–0.92 in EURCHF are the zones markets are monitoring for signs of either further CHF strength or potential SNB discomfort.





🔺 JPY – Intervention risk keeps yen bid into the Fed



USDJPY is hovering in the 152–153 region after a drop of more than a percent yesterday, as traders stay alert to the prospect of coordinated US–Japan action and to any shift in Fed tone.


Japan’s policy rate remains at 0.75 percent, far below US levels, and the BoJ is still only slowly normalising policy, so structurally the yen is still used as a funding currency. What has changed is the perceived tolerance for further weakness: below the mid 150s, investors worry less about official action; above those levels, every uptick is now read through a lens of intervention risk.


Into the Fed, risks for JPY are tilted toward further strength overall, especially if Powell does not push back against a weaker dollar and if US yields remain contained. That said, the pair is likely to stay volatile, with any hawkish nuance from the Fed capable of producing a sharp, though possibly short lived, bounce in USDJPY.


Reference areas: roughly 150–152 as support for further yen strength and 155–156 as a zone where intervention fears would quickly re-intensify if revisited.





⚖️ AUD – Strong but wobbling after CPI, still very data sensitive



AUDUSD has had a wild 24 hours. The pair traded above 0.70, a three year high, before slipping back just below that level after Australia’s December CPI printed at 3.6 percent year on year, in line with expectations, which was not quite strong enough to guarantee a February RBA hike.


The bigger picture is still supportive: inflation remains above target, labour data are tight, and the market prices a meaningful chance of more RBA tightening versus a Fed on hold, so rate differentials are less negative for AUD than they were a year ago. However, the currency has already run a long way on the “Sell America” story, so any disappointment in Chinese data or a hawkish twist from the Fed could trigger a more pronounced correction.


For the rest of the week, AUD risks look roughly balanced. There is scope to hold or slightly extend gains if the Fed is benign and risk sentiment stays firm, but the bar for fresh positive surprises is now higher.


Reference areas:0.69–0.70 is the immediate pivot band, with 0.685 as short term support and 0.71 as an area that would look stretched without another clear upside surprise.





🔺 NZD – Quiet beneficiary of USD weakness and stubborn inflation



NZDUSD trades just above 0.60, with some trackers showing spot in the 0.601–0.603 area, as the kiwi rides the same dollar and gold themes that have lifted other non US assets.


Recent New Zealand inflation data around 3.1 percent year on year keep CPI slightly above the top of the RBNZ’s 1–3 percent target band, which justifies a patient stance on cuts even though growth is not spectacular. That combination gives NZD some rate support while still leaving it firmly in the “higher beta” bucket that responds strongly to global risk swings.


In the near term, risks for NZD lean modestly bullish versus USD, especially if the Fed validates the current weak dollar narrative and equities stay supported. Versus AUD, the kiwi may lag somewhat, since the RBA debate is more live and Australia has the stronger commodity story, but it can still perform well on the crosses if global risk remains constructive.


Reference areas:0.59 as nearby support and the 0.61–0.62 band as the next resistance zone that would signal a more decisive trend shift if broken.





Cross-asset wrap



  • 🪙 Gold:
    Gold is the headline asset again, trading around 5,230–5,260 dollars an ounce after breaking through 5,200 for the first time earlier today. The move is being driven by a weaker dollar, elevated geopolitical and institutional risk, and strong haven demand ahead of the Fed decision. This is less about hot inflation data and more about investors questioning policy credibility and seeking insurance.
  • 🛢 Oil:
    Brent is hovering near 65–66 dollars and WTI around 60–61, moving in a relatively narrow band as winter weather and Middle East risk are balanced by comfortable supply and steady demand. At these levels, oil keeps some upward pressure on headline inflation but does not force any immediate change in central bank messaging, including from the Fed tonight.
  • 📈 Stocks:
    Global equities are leaning higher. Asian indices have been boosted by AI and tech optimism, European stocks are modestly firmer, and the S&P 500 is again testing record territory around the 6,980 region, with volatility still contained in the mid teens. The message is that investors are willing to stay in risk assets while hedging with gold and FX havens rather than reducing exposure aggressively, which makes the Fed’s communication tone especially important for whether this regime continues.
  • ₿ Crypto:
    Bitcoin is trading in the high 80,000s to low 90,000s, broadly rangebound compared with the explosive move in gold. Crypto is trading as a high beta macro asset, responding to swings in the dollar, real yields and tech sentiment rather than acting as the primary hedge. A softer Fed and continued dollar weakness would typically support the complex, but elevated volatility around the decision means large two sided moves are possible through the end of the week.






This is general, educational macro and FX commentary. It is not investment advice and not a trading signal.


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