The Swiss Franc touched 0.78 against the USD, the highest since January 2015. Over the past 4 weeks, US Dollar Swiss Franc lost 0.78%, and in the last 12 months, it decreased 13.71%.

Swiss Franc Hits 11-year High

The Mexican peso strengthened past 17.4 per US dollar, resuming its rally to the strongest levels since June 2024 after a brief pullback linked to renewed US–Europe trade frictions around President Trump’s Greenland remarks, which temporarily pushed global flows toward safer and more liquid assets. The move higher underscores the peso’s underlying resilience, anchored by Banco de México’s increasingly cautious stance after pausing its easing cycle with the policy rate at 7%, preserving a still-compelling real yield buffer that continues to attract non-resident demand for peso-denominated fixed income. While talk of calibrated European retaliation, including potential use of the EU’s Anti-Coercion Instrument, and reports of marginal reductions in European Treasury holdings injected short-lived volatility into global FX markets.

Mexican Peso at June-2024 Highs

The Japanese Yen touched 155.68 against the USD, the highest since December 2025. Over the past 4 weeks, US Dollar Japanese Yen lost 0%, and in the last 12 months, it decreased 0.08%.

Japanese Yen Hits 4-week High

EURUSD increased to 1.18, the highest since December 2025. Over the past 4 weeks, Euro US Dollar gained 0.04%, and in the last 12 months, it increased 12.25%.

Euro Hits 4-week High

DXY decreased to 97.91, the lowest since December 2025. Over the past 4 weeks, Dollar Index lost 0.02%, and in the last 12 months, it decreased 8.86%.

Dollar Index Hits 4-week Low

The dollar index fell to 98.1 on Friday, approaching the lowest level in over three months as currency markets maintained their aversion to the greenback on unpredictable economic policy from the United States. President Trump initially threatened major European countries that opposed his plan to acquire Greenland with new tariffs while his administration struck a hawkish tone with Denmark and other NATO members, before reversing course and suspending tariffs while refraining from disclosing details on agreements. The dollar was also pressured by expectations that the Federal Reserve is due to cut rates more than other major central banks this week. Data from the Conference Board showed a decline in the US's leading economic indicator, and the survey from UMich showed a downward revision in inflation expectations. Conversely, the BoJ delivered a hawkish hold while PMI aggregates in the Eurozone pointed to steady growth and a series of data from the UK backed hawks in the BoE's MPC.

DXY Falls Toward 3-Month Low

GBPUSD increased to 1.36, the highest since September 2025. Over the past 4 weeks, British Pound US Dollar gained 0.47%, and in the last 12 months, it increased 8.67%.

British Pound Hits 18-week High

The Canadian dollar strengthened toward 1.376 per US dollar, nearing monthly highs amid firmer oil prices, a steadier Canadian policy outlook, and a weaker US dollar. Support came first from energy, with oil prices firming on supply disruptions in Kazakhstan and steadier North American balances, improving Canada’s terms of trade and underpinning export revenues. At the same time, inflation dynamics argued against near-term policy easing, as headline CPI had recently surprised to the upside at 2.4%, keeping price growth slightly above the Bank of Canada’s 2% target even as producer prices cooled and signaled easing upstream pressures. This mix reinforced expectations that the BoC will keep its policy rate at 2.25% for longer, limiting downside pressure on yield differentials. The loonie also benefited from a softer US dollar as Washington dialed back trade and geopolitical threats tied to Greenland, reducing safe-haven demand for the greenback.

Canadian Dollar Nears Monthly Highs

The British pound climbed above $1.35, its highest level in over two weeks, as traders scaled back expectations for Bank of England rate cuts following comments from policymaker Megan Greene and stronger-than-expected UK economic data. Greene noted that a central bank survey suggests the decline in wage growth has run its course, and she expressed less concern over slowing disinflation, while looser US monetary policy could support higher UK inflation. Meanwhile, S&P Global PMI data showed UK private sector activity expanded in January at its fastest pace since April 2024, while retail sales rose 0.4% in December, surpassing expectations. Consumer confidence also climbed to its highest level since August 2024. These reports follow earlier data showing a hotter-than-expected headline CPI of 3.4% in December. Elsewhere, US-Europe trade tensions eased for now after President Donald Trump announced he would refrain from imposing tariffs on European goods opposing his Greenland plan.

Pound at Over Two-Week High on Strong UK Data

The euro hovered just below the $1.175 level as investors digested mixed PMI readings from Europe’s largest economies while assessing the potential impact of ongoing trade tensions linked to Greenland. S&P Global data showed that private sector activity in the euro area expanded in January at a slightly slower-than-expected pace, with easing growth in services partially offset by a moderation in the manufacturing downturn. Germany’s data pointed to stronger-than-forecast growth during the month, while France’s business activity unexpectedly slipped into contraction as weaker services outweighed gains in manufacturing. Meanwhile, geopolitical uncertainty remains elevated. US President Donald Trump said he would refrain from imposing tariffs on goods from European countries opposing his plan to take control of Greenland, while adding that a “framework for a future deal” had been agreed following talks with NATO Secretary-General Mark Rutte, although no details were provided.

Euro Steadies Amid Mixed PMI Data and Trade Uncertainty

The Japanese yen steadied around 158.3 per dollar on Friday after falling earlier in the session, following the Bank of Japan’s decision to keep its policy rate unchanged. Traders remain on high alert for potential intervention by Japanese authorities as the currency continues to hover near multi-decade lows. The BOJ held rates at 0.75%, as widely expected, after raising it to a 30-year high of 0.75% last month. The central bank reaffirmed that it is prepared to raise rates if its economic and price projections materialize, having revised four of six inflation forecasts upward. Traders remain concerned that the yen could face further pressure if the BOJ stops short of clearly signaling additional rate hikes, amid mounting fiscal concerns that have already triggered sell-offs in domestic bonds and the currency.

Yen Steadies

USDINR increased to an all-time high of 91.83. Over the past 4 weeks, US Dollar Indian Rupee gained 2.18%, and in the last 12 months, it increased 6.48%.

Indian Rupee Hits All-time Low

The Indonesian rupiah firmed to around IDR 16,825 per dollar on Friday, up for a third session after the central bank earlier this week kept its key rate at 4.75% for a fourth straight meeting, in line with expectations. Policymakers said that their focus is on currency stability amid global headwinds, with Governor Perry Warjiyo adding the board would not hesitate to intervene heavily to support the rupiah, noting forex reserves climbed to a nine-month high in December 2025. However, the currency remains on track for its first weekly drop in three weeks, as officials continue to signal scope for further easing following a cumulative 150bp cut between September 2024 and September 2025. The outlook is underpinned by subdued inflation, projected to stay within the 1-1/2%–3-1/2% target range in 2026-2027. Globally, the dollar index was little changed but headed for a weekly loss amid easing geopolitical tensions and expectations that the Fed will hold interest rates steady next week.

Rupiah Strengthens for 3rd Session Despite Weekly Loss Risk

The Japanese yen depreciated to around 158.7 per dollar on Friday, extending this week’s decline after the Bank of Japan kept its policy rate unchanged as widely expected, after raising it to a 30-year high of 0.75% last month. The central bank reaffirmed that it is prepared to raise rates if its economic and price projections materialize, having revised four of six inflation forecasts upward. Traders remain concerned that the yen could face further pressure if Governor Kazuo Ueda stops short of signaling additional rate hikes, amid mounting fiscal worries that have already sparked selloffs in domestic bonds and the currency. Prime Minister Sanae Takaichi is preparing to dissolve parliament and call a snap election to consolidate power and pursue increased spending. Meanwhile, market participants are closely monitoring for potential currency intervention as the yen approaches the key 160 level.

Yen Weakens After BOJ Stands Pat

The Australian dollar held its recent gains around $0.684, trading near a sixteen-month high, as strong jobs data boosted expectations of a near-term rate hike, while upbeat PMI figures further supported sentiment. Flash data showed the composite PMI rose to 55.5 in January, its sixteenth straight month of expansion and the strongest since April 2022. The improvement reflected faster growth in both major sectors, with factory activity growing for a third month and services PMI seeing its sharpest rise since early 2022. Additionally, recent data showed the unemployment rate unexpectedly fell in December to a seven-month low. Along with sticky inflation and increasingly hawkish signals from the Reserve Bank, this has boosted bets for rate hikes. Swaps now price a 55.7% chance of a rate increase in February, up from 26.5% before the data, with over 80% odds for a hike by May. The focus now turns to next week’s quarterly inflation data, the central bank’s preferred measure of price growth.

Australian Dollar Holds Near 16-Month High

The offshore yuan edged higher to around 6.95 per dollar on Friday, snapping a two-session losing streak as the People’s Bank of China set its daily midpoint fixing stronger than the psychologically important 7-per-dollar level. The central bank fixed the yuan at 6.9929 per dollar, marking the first time the reference rate has been set below 7 since May 2023. The move underscores a shift in official tolerance toward a stronger currency, signaling policymakers’ comfort with further yuan appreciation and their willingness to accommodate additional gains amid a weaker greenback. During the past month, the yuan has surged around 1% against the US dollar, surpassing most regional currencies. The gains have been supported by the country’s outsized $1.2 trillion trade surplus, stronger capital inflows, and improving sentiment toward Chinese equities. For the week, the currency is on track for a second consecutive advance, hovering near its strongest level since May 2023.

Offshore Yuan Gains on Stronger Fixing

The New Zealand dollar dipped to around $0.592 but remained on track for its strongest week since April 2025, following a hotter-than-expected CPI print. Annual inflation rose to 3.1% in Q4, above forecasts of 3%, exceeding the Reserve Bank’s target band and marking the highest reading since Q2 2024. While policymakers expect inflation to ease toward 2% this year, the strong data suggests the easing phase is likely over, raising the possibility of higher interest rates. Near-term expectations, however, remain largely unchanged, with markets seeing almost no chance of a move in February after Governor Anna Breman in December pushed back against bets of an immediate hike. Investors now price in a high likelihood of a rate increase by September, with roughly a 50% chance of a move in July. Elsewhere, ongoing weakness in the US dollar provided additional support to the kiwi.

Kiwi Dollar Set for Sharp Weekly Rise

The Japanese yen slipped past 158.5 per dollar on Friday, extending this week’s decline as investors awaited the Bank of Japan’s latest policy decision. The central bank is widely expected to keep its policy rate unchanged after raising it to a 30-year high of 0.75% last month. Traders will closely watch Governor Kazuo Ueda’s post-meeting remarks for guidance on the timing of the next rate hike amid growing concerns over the yen’s weakness. Data showed Japan’s core inflation slowed in December but remained above the BOJ’s 2% target. The currency came under pressure in recent sessions from escalating fiscal worries, as Prime Minister Sanae Takaichi prepares to dissolve parliament and call a snap election to consolidate power and pursue increased spending. Meanwhile, traders remain alert for potential currency intervention as the yen approaches the key 160 level.

Yen Edges Lower Ahead of BOJ

The dollar index held around 98.3 on Friday and was set to lose about 1% for the week, ending a volatile week in deep water as shifting geopolitical dynamics unnerved investors. President Donald Trump initially threatened several European countries that opposed his plan to take over Greenland with new tariffs, before reversing course after securing a framework agreement with NATO for a potential future deal. While details of the agreement remain unclear, markets are speculating it could involve mineral rights and the installation of missile systems. Concerns also grew that Europe might leverage its substantial US asset holdings, with a Danish pension fund announcing it would exit its Treasury positions, adding to market uncertainty. On the policy front, the Federal Reserve is widely expected to maintain interest rates next week. The dollar’s decline this week was most pronounced against the euro and major antipodean currencies.

Dollar Set for Sharp Weekly Drop

The South African rand extended its rally to trade around 16.2 per USD, reaching the highest since June 2022, benefiting from record-high precious metals prices, particularly gold and silver. Meanwhile, economic data showed that South African inflation remains under control, which should give the central bank room to cut interest rates this year. Inflation was marginally higher at 3.6% in January, but remained within the SARB’s 1-percentage-point tolerance band around its new 3% target. The 2025 average inflation rate hit a 21-year low of 3.2%, below the central bank’s 3.3% forecast. While a benign inflation outlook leaves scope for a rate cut at the upcoming meeting later this month, analysts remain divided, with the balance of factors suggesting the South African Reserve Bank is more likely to keep interest rates unchanged. The SARB will ultimately weigh both domestic inflation conditions and global risks before taking the next step in the rate-cutting cycle.

South African Rand Maintains Strength

The dollar index edged down to around 98.6 on Thursday, as reduced geopolitical tensions weighed on safe haven demand. The move followed a dial back in US threats over acquiring Greenland, which helped calm global markets after President Donald Trump said he would no longer impose new tariffs on European imports due to start on February 1 and announced a framework for a deal over Greenland. NATO’s chief said a breakthrough had been reached without discussions on Greenland’s sovereignty, focusing instead on broader Arctic security. The dollar’s decline came despite a run of solid US data that underscored economic resilience. Third quarter GDP growth was revised higher to a 4.4% annualized pace, the fastest in two years, supported by stronger exports, while initial jobless claims steadied at 200,000 after holiday related volatility. The robust data backdrop supports expectations that the Federal Reserve will keep interest rates on hold in January.

DXY Edges Down on Thursday

The Turkish lira weakened to a record low of 43.3 per USD in January, maintaining the controlled depreciation trend by the Central Bank of Turkey as markets assessed the outlook of currency flows for the year. The central bank continued to manage their foreign exchange reserves and maintained measures to stimulate lira deposits by domestic investors to control the pace of the currency's depreciation, which is set to lose around 18% of its value against the dollar this year. In the meantime, the TCMB cut its benchmark policy rate by 10.5 percentage points to 37% in its January meeting, noting that slowing trends in underlying inflation warrant a softer magnitude of restrictive policy, even though higher food prices supported the headline rate. The latest inflation rate held close to the 31% mark, firmly above the 27% hike in the national minimum wage for the year, which extended the trend of undershooting official inflation figures to squeeze purchasing power.

Turkish Lira Extends Controlled Weakening

The Swiss franc hovered near 0.79 per USD, approaching its strongest level since 2011, as persistent but subdued safe-haven flows lifted the currency. Despite easing US–Europe geopolitical tensions, risks remain. Trump withdrew threatened tariffs on European countries after meeting NATO Secretary General Mark Rutte, agreeing on a framework for a future Greenland deal. This ended weeks of rhetoric that unsettled Europe and raised fears of a renewed global trade war. However, details of the framework remain unclear, with Denmark ruling out any negotiations over ceding territory, while Trump has not ruled out possible military action in Iran. Meanwhile, SNB President Martin Schlegel noted that negative inflation readings are possible this year but are not worrisome, as the central bank prioritizes medium-term inflation. With rates held at 0% for two meetings, officials signal that cuts below this level carry substantial risks. Neither rate cuts or hikes are expected in the near-term.

Swiss Franc Holds Ground

The British pound hovered around $1.34, staying above the four-week low of $1.338 touched on January 15, as US-Europe tensions appeared to ease for now. US President Donald Trump said he would refrain from imposing tariffs on goods from European countries opposing his plan to take control of Greenland. He also noted that a “framework for a future deal” had been agreed following talks with NATO, though details of any agreement remain unclear. Meanwhile, investors digested a batch of UK economic data. The public sector budget deficit narrowed to £11.6 billion in December, below market expectations of £13 billion. Headline CPI inflation rose to 3.4%, slightly above forecasts of 3.3%, while services inflation, a key measure of domestic price pressures watched by the Bank of England, edged up to 4.5% from 4.4%, marking a smaller-than-expected increase. The unemployment rate remained at 5.1%, a pandemic-era high, while wage growth slowed to 4.5%, its weakest pace since April 2022.

Pound Holds Above Four-Week Low Amid Eased US-Europe Tensions

The euro was little changed at $1.17, near its strongest level in two weeks, as US-Europe tensions appeared to ease temporarily. US President Donald Trump said he would refrain from imposing tariffs on goods from European countries opposing his plan to take control of Greenland. He added that a “framework for a future deal” had been agreed following talks with NATO Secretary-General Mark Rutte, though no details of the arrangement were disclosed. The announcement provided some relief to markets, but geopolitical uncertainty remains elevated. Denmark has ruled out negotiations on ceding control of Greenland, and Danish Prime Minister Mette Frederiksen reiterated that while security and investment matters can be discussed, sovereignty is non-negotiable. On the policy front, signs of a resilient Eurozone economy and inflation near target continue to support expectations that the European Central Bank is likely to keep interest rates on hold for the foreseeable future.

Euro Holds Near Two-Week High as US-Europe Tensions Ease

The Norwegian krone strengthened to around 9.9 per US dollar, its firmest level since September 23, after the Norges Bank left interest rates unchanged and reaffirmed its December policy outlook, which still points to one to two rate cuts in 2026. The central bank held its policy rate at 4% and said rates could be lowered later in the year if the economy develops broadly in line with projections, pushing back against market expectations that heightened geopolitical uncertainty could prompt an earlier rate cut. Policymakers emphasized that a restrictive stance remains necessary, with inflation still above target. The krone also benefited from improved risk sentiment after US President Donald Trump called off proposed tariffs on several European countries that had opposed his plan to “buy” Greenland, and announced a framework for future negotiations on Greenland with NATO. While the move eased some tensions, geopolitical uncertainty remains elevated.

Norwegian Krone Strengthens to Four-Month High

The Russian Ruble touched 74.95 against the USD, the highest since May 2023. Over the past 4 weeks, US Dollar Russian Ruble lost 3.46%, and in the last 12 months, it decreased 24.6%.

Russian Ruble Hits 32-month High

The Indonesian rupiah hovered around IDR 16,900 per dollar on Thursday, little changed from the prior session after Bank Indonesia kept its key rate at 4.75% for a fourth straight meeting Wednesday, in line with consensus. Governor Perry Warjiyo pledged that policymakers would not hesitate to intervene “in large amounts” to stabilize the currency, noting that foreign reserves hit a nine-month high in December 2025. He added the bank’s commitment to guard rupiah stability and guiding it toward gradual strengthening, due to solid fundamentals. However, Warjiyo signaled scope to resume rate cuts, with inflation projected to stay within the 1-1/2%–3-1/2% target range over the next two years. Bank Indonesia has cut rates by 150bps between September 2024 and September 2025. The governor reiterated that the economy is still running below potential, keeping the 2026 growth outlook at 4.9%–5.7% versus 4.7%–5.5% for 2025. Globally, the dollar index held firm as U.S.–Europe trade tensions eased.

Rupiah Steady around IDR 16,900

The offshore yuan held steady around 6.95 per dollar on Thursday, after sliding in the previous session, as markets saw the weaker-than-expected daily fixing as a deliberate effort to maintain a “measured and orderly” pace of currency appreciation. The People’s Bank of China set the midpoint rate at 7.0019 per dollar, 322 pips weaker than a Reuters estimate. The latest move, which has been part of a pattern seen since early December, highlighted Beijing’s strategy to prevent a swift dollar unloading, curb sudden fluctuations, and support market stability. Adding further support to the yuan were continued foreign-exchange settlements from exporters, alongside foreign inflows into Chinese equities amid sustained investor optimism around artificial intelligence. On the economic front, urban youth unemployment among 16- to 24-year-olds, excluding students, fell to 16.5% in November 2025 from 16.9% in October, marking the lowest level since June.

Offshore Yuan Steady

The New Zealand dollar rose to around $0.585, reaching a four-month high, as investors now await the fourth-quarter CPI report, due on Friday, for more clues on the Reserve Bank's policy outlook. Annual inflation is expected to rise to 3%, the upper bound of the RBNZ’s 1-3% target range. Any upside surprise would strengthen the case for higher interest rates. Recent economic data have pointed to a firming recovery in New Zealand’s economy, reinforcing the view that the RBNZ may begin tightening policy later this year. While markets see almost no chance of a move in February, the probability of a hike by July has risen above 50%. Meanwhile, Prime Minister Luxon on Wednesday announced a national election will be held on November 7. The kiwi also benefited from improved global risk sentiment after US President Donald Trump withdrew tariff threats against eight European countries and said a “framework of a future deal” over Greenland had been reached.

Kiwi Dollar Hits 4-Month High Ahead of Inflation Data

The South Korean won slipped to around 1,470 per dollar, sharply pulling back gains from the previous session as investors assessed recent comments from Bank of Korea Governor Rhee Chang-yong. On Wednesday, he announced in a conference that the currency is trading well below levels justified by economic fundamentals but warned that any rebound could be volatile. Rhee stated that the exchange rate has been driven up by long-standing expectations of further won depreciation, which may take time to reverse. He also pointed out that the heavy overseas investing by institutions like the National Pension Service and retail investors, often without currency hedging, could amplify market volatility if the exchange rate adjusts sharply. Further weighing on sentiment, South Korea’s economy unexpectedly contracted in the final quarter of 2025, marking the steepest decline since late 2022.

Korean Won Slides as BOK Signals Risk

The Japanese yen slipped toward 158.5 per dollar on Thursday, remaining under pressure amid a deteriorating fiscal outlook, while the Bank of Japan kicked off a two-day policy meeting. Prime Minister Sanae Takaichi called a snap election and pledged looser fiscal measures, including a proposal to eliminate the 8% sales tax on food. Meanwhile, the BOJ is widely expected to keep its policy rate steady at 0.75% on Friday following December’s rate hike. Traders stayed alert to potential yen intervention amid concerns over the impact of a weaker currency on domestic inflation. On the data front, Japan’s exports rose for a fourth consecutive month in December to a record level, supported by steady demand from China despite ongoing diplomatic tensions. Full-year exports also increased in 2025, even as shipments to the US fell for the first time since the pandemic amid challenging trade policies.

Japanese Yen Pressured by Fiscal Concerns

The Australian dollar strengthened to around $0.679 on Thursday, approaching a sixteen-month high, as easing US-Europe tensions improved risk sentiment, while strong local jobs data boosted bets on a near-term rate hike. Data showed employment surged by 65,200 in December, well above forecasts, while the unemployment rate unexpectedly fell to a seven-month low of 4.1%. The robust labor market, along with rising household spending, suggests the economy is accelerating faster than expected. This prompted markets to sharply lift bets for a 25bp rate hike at the Reserve Bank’s February 3 meeting, with the odds jumping to 54% from 27% before the data, and a hike now fully priced by May. Attention now turns to next week’s December-quarter inflation data, where a core inflation increase could push an earlier policy move. Elsewhere, US President Trump ruled out using force to take Greenland and dropped plans to impose tariffs on European nations, easing market worries.

Australian Dollar Approaches 16-Month High

The dollar index steadied around 98.8 on Thursday, holding gains from the previous session as geopolitical and trade tensions between the US and Europe over Greenland eased. President Donald Trump ruled out the use of military force to acquire Greenland and walked back tariff threats against European countries after reaching a framework for a future agreement with NATO. However, details of the framework remain unclear, with Denmark ruling out any negotiations over ceding territory to the US. On the domestic front, investors looked ahead to weekly jobless claims for fresh signals on the labor market. The Federal Reserve is widely expected to keep interest rates unchanged next week, though markets still anticipate rate cuts totaling 50 basis points later this year. The dollar strengthened mainly against the euro, while continuing to weaken versus the Australian and New Zealand dollars.

Dollar Firms on Easing Tensions

The euro hovered around $1.17, close to its strongest level in two weeks, as investors digested remarks from US President Donald Trump at the World Economic Forum in Davos amid ongoing geopolitical strains. Trump reiterated his bid to acquire Greenland but ruled out taking the Arctic island by force. Tensions remain high, however, as the European Parliament’s trade committee indefinitely postponed a ratification vote on a US trade deal, reflecting growing unease in Europe over Trump’s ambitions. The US has threatened tariffs on several European countries unless it is allowed to purchase Greenland, straining the transatlantic alliance. On the policy front, signs of a resilient Eurozone economy and inflation near target support expectations that the European Central Bank is likely to maintain interest rates at current levels for the foreseeable future.

Euro Holds Near 2-Week High Amid Geopolitical Tensions

The dollar index pared early losses to trade around 98.6 on Wednesday, as investors assessed President Trump’s speech at the World Economic Forum in Davos. The president reiterated his bid to acquire Greenland, stating that he was “seeking immediate negotiations to once again discuss the acquisition of Greenland by the US,” while ruling out the use of force. Meanwhile, concerns over a renewed trade war between the US and Europe persisted, with European lawmakers suspending approval of the trade agreement reached between the EU and the US in July. The dollar has remained under pressure this week, as fresh tariff threats against Europe and President Trump’s renewed push to acquire Greenland have revived the so-called “Sell America” trade.

Dollar Pares Losses

The Brazilian real strengthened past 5.33 per US dollar, reversing its earlier slide toward monthly lows and reaching its strongest level since early December as global markets rotated away from US assets and back into higher-yielding emerging markets. The move reflects a broader EM pattern, where headline-driven risk aversion briefly pressured currencies before flows quickly reasserted support. Tensions between the US and Europe over Greenland have weighed on confidence in American assets, driving broad dollar weakness and lifting demand for alternatives. Domestically, the real has continued to attract foreign inflows despite softer inflation readings that had temporarily pulled forward expectations of Selic cuts. While disinflation has slightly reduced Brazil’s carry appeal, the yield differential remains wide enough to sustain real-denominated exposure, with election-related noise and the Central Bank’s extrajudicial liquidation of Will Financeira having little impact so far.

Brazilian Real Rebounds to Early December Highs

The Mexican peso strengthened past 17.5 per US dollar, resuming its rally to the strongest levels since June 2024 after a brief pullback linked to renewed US–Europe trade frictions around President Trump’s Greenland remarks, which temporarily pushed global flows toward safer and more liquid assets. The move higher underscores the peso’s underlying resilience, anchored by Banco de México’s increasingly cautious stance after pausing its easing cycle with the policy rate at 7%, preserving a still-compelling real yield buffer that continues to attract non-resident demand for peso-denominated fixed income. While talk of calibrated European retaliation, including potential use of the EU’s Anti-Coercion Instrument, and reports of marginal reductions in European Treasury holdings injected short-lived volatility into global FX markets.

Mexican Peso Reaches June-2024 Highs

The South African Rand touched 16.29 against the USD, the highest since August 2022. Over the past 4 weeks, US Dollar South African Rand lost 2.42%, and in the last 12 months, it decreased 11.76%.

South African Rand Hits 3-1/2-year High

AUDUSD increased to 0.68, the highest since October 2024. Over the past 4 weeks, Australian Dollar US Dollar gained 1.62%, and in the last 12 months, it increased 7.85%.

Australian Dollar Hits 15-month High

The Swiss franc was little changed around 0.792 per USD, holding close to 2011-highs, buoyed by safe-haven flows following tariff threats from US President Donald Trump toward several European nations over the Greenland issue. European leaders’ readiness to retaliate has revived fears of a wider trade conflict. Meanwhile, market participants continued to assess the interest rate outlook. Swiss National Bank President Martin Schlegel, speaking on the sidelines of the World Economic Forum in Davos, said that negative inflation readings are possible this year but emphasized that they are not a concern, as the central bank’s focus is on medium-term inflation. The central bank has held its rate at zero for two meetings, indicating that the risks of cutting below this level remain substantial.

Swiss Franc Hovers Around 2011-Highs

The South African rand strengthened to around 16.3 per USD, staying near its highest level since August 2022, buoyed by rising gold and other precious metal prices. Traders also weighed December’s inflation data and its potential impact on the central bank’s next moves. Annual inflation inched up to 3.6% from 3.5%, in line with expectations, remaining well within the SARB’s 1-percentage-point tolerance band around its new 3% target. The 2025 average inflation rate hit a 21-year low of 3.2%, below the central bank’s 3.3% forecast, raising the possibility of a rate cut on January 29. SARB Governor Lesetja Kganyago told Bloomberg TV at Davos that inflation is expected to meet the 3% target in 2026, with prices remaining broadly stable.

South African Rand at 2022-Highs

The Indonesian rupiah traded near IDR 16,930 per dollar on Wednesday afternoon, recovering from an intraday low beyond 16,970 after Bank Indonesia unanimously kept its key rate at 4.75% for a fourth straight meeting, in line with estimates. Governor Perry Warjiyo said the decision was aimed at supporting rupiah stability while strengthening policy transmission. The central bank has already cut rates by a cumulative 150bps between September 2024 and September 2025 to spur economic growth. Recent data suggest the easing cycle is taking hold, with loan growth hitting a ten-month high of 9.69% in December, even as undisbursed credit facilities stayed elevated, pointing to still-cautious lending. Bank Indonesia expects the rupiah to stabilize, but policymakers noted that room for further easing remains, supported by a mild inflation outlook for 2026 and 2027. Globally, the dollar index hovered around 98.5 as investors awaited President Trump’s address at the World Economic Forum in Davos.

Rupiah Firms Slightly After Bank Indonesia Holds Rates

The pound was little changed at $1.344, holding above a four-week low of around $1.338 touched on January 15, after fresh data showed UK inflation accelerated more than expected in December, curbing expectations for further interest rate cuts by the Bank of England. Annual inflation rose to 3.4%, up from November’s eight-month low of 3.2% and above market forecasts of 3.3%. Core inflation was unchanged at 3.2%, in line with expectations, while services inflation, closely monitored by the BoE as a gauge of domestic price pressures, edged up to 4.5% from 4.4%, marking a smaller-than-anticipated increase. The data followed a labor market report showing the unemployment rate unchanged at a pandemic-era high of 5.1%. Elsewhere, the US dollar remained under pressure, as heightened tensions between the US and Europe, sparked by President Donald Trump’s escalating threats over Greenland, weighed on confidence in US assets.

Pound Steady as Hotter UK Inflation Tempers BoE Rate-Cut Hopes

The Indian rupee fell toward 91.3 per dollar on Wednesday, hitting an all-time low amid persistent foreign capital outflows and heightened geopolitical uncertainty. Foreign investors have withdrawn $2.7 billion from Indian equities so far this month, adding to last year’s roughly $19 billion of net outflows. Market sentiment is further pressured by the postponement of a US trade agreement, with a steep 50% tariff limiting exports and sustained import demand driving dollar requirements. Geopolitical tensions, including US President Trump’s renewed Greenland push and risks of a broader US-Europe trade dispute, have triggered risk aversion, prompting investors to favor safe-haven assets and pressuring emerging-market currencies, including the rupee. The Reserve Bank of India has intervened through dollar sales to curb the pace of depreciation, although traders note that these actions aim to slow, not reverse, the trend.

Indian Rupee Hits Weakest on Record

The Indonesian rupiah hovered near IDR 16,970 per dollar on Wednesday, staying close to the 17,000 mark that would signal a new low. Focus turned to the central bank’s policy decision later today, with interest rates expected to stay unchanged for a fourth straight month. However, speculation over further easing intensifies, as policymakers aim to aid growth following last year’s disaster in Sumatra. The board has already delivered 150bps of cuts over the past year amid subdued inflation. Since early 2026, the rupiah has fallen near 2%, unsettled by renewed concerns over institutional independence after President Prabowo nominated his nephew to the central bank’s board of governors. Finance Minister Purbaya Yudhi sought to reassure investors, affirming the bank’s autonomy and voicing confidence in a gradual rupiah recovery. Globally, the dollar index fell for a third session after U.S. President Trump vowed there was “no going back” on his Greenland plan, deepening geopolitical risks.

Rupiah Weakens Toward Record Low Ahead of Rate Decision

The New Zealand dollar traded around $0.583, near an over three-week high, supported by a weaker dollar amid renewed US-EU trade tensions. Investors are watching for Europe’s response, set to be discussed at an emergency meeting on Thursday, after President Trump threatened to impose extra tariffs on several European allies unless a deal over Greenland’s acquisition is reached. At home, a series of upbeat economic data has signaled that New Zealand’s economic recovery is gaining momentum, reinforcing expectations that the RBNZ could begin tightening policy later this year. While markets see almost no chance of a move in February, the probability of a hike by July has risen above 50%. Attention now turns to fourth-quarter CPI report on Friday, with annual rate expected at 3%, the upper bound of the RBNZ’s 1–3% target range. A stronger reading would boost the case for higher rates. Meanwhile, Prime Minister Luxon has announced a national election will be held on November 7.

New Zealand Dollar Holds at Over 3-Week High

The offshore yuan weakened to around 6.96 per dollar on Wednesday, snapping a two-session gain as the People’s Bank of China kept the daily fixing weak. The central bank fixed the reference rate at 7.0014 per dollar, softer than estimates from both Reuters and Bloomberg. Policymakers remain wary that excessive currency strength could squeeze exporters, tighten domestic financial conditions, or trigger destabilising capital flows. In response, the weaker-than-expected fixing continued a pattern seen since early December, reflecting Beijing’s determination to manage the pace of yuan appreciation amid capital inflows that buoy sentiment and a declining US dollar. Investors view this approach as a familiar FX playbook, in which authorities tolerate currency strength consistent with macro fundamentals but lean against momentum-driven trades. On the monetary policy front, the PBoC kept the one- and five-year loan prime rates at 3% and 3.5%, marking eight months of policy stability.

Offshore Yuan Falls as PBoC Maintains Weak Fixing

The South Korean won advanced to around 1,471 per dollar, rebounding sharply from a four-week low after investor sentiment improved on government assurances. President Lee Jae Myung stated that policymakers expect the won to move back toward the 1,400 level over the next two months, stressing that its recent weakness reflects global market conditions rather than domestic fundamentals alone. He assured that the government would keep reviewing available tools to curb volatility, while acknowledging that stabilizing the currency would be difficult to achieve through national policies alone. Adding to positive sentiment, Finance Minister Koo Yun-cheol on Wednesday announced policy measures aimed at boosting economic growth and reducing disparities. Under its 2026 economic plan, the government aims to kickstart a rebound in potential growth, raising funds to 1.7 trillion won from 1 trillion won.

Korean Won Rebounds on Stability Plans

The Japanese yen held steady around 158 per dollar on Wednesday, but faced downward pressure after Prime Minister Sanae Takaichi’s proposal to cut the 8% sales tax on food raised concerns about the fiscal outlook as it remains unclear how the government will make up for the lost revenue. Earlier this week, Takaichi announced she will dissolve parliament on Friday and call a snap general election on Feb. 8 to secure support for her spending plans and broader policies. Investors also eyed the Bank of Japan’s policy meeting later this week, where rates are widely expected to stay unchanged following a December hike. Traders remained alert to potential yen intervention amid worries about the impact of a weaker currency on domestic inflation. The yen, however, found some support from a softer dollar as escalating US-Europe tensions over Greenland hurt confidence in US assets.

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