Last Updated on January 26, 2026 by Deon
Is the Dollar’s Winning Streak Over? Why the Greenback is Losing Steam After a strong start to the year, the US Dollar’s momentum has hit a major roadblock. For the first time in weeks, the “Greenback” ended on a lower note,
The most dramatic move has been in the USD/JPY exchange rate. Just last Friday, the pair was trading as high as 159.23; by today, it had tumbled to a low of 153.40. Why the sudden drop? There is growing chatter about potential market intervention. If the US and Japan were to step in together to support the Yen,
as investors start to second-guess the stability of US policy. According to the latest insights from MUFG analysts Lee Hardman and Abdul-Ahad Lockhart, the market is shifting from “buying the dollar” to “hedging against it.” Here is a look at the forces pushing the USD down. The “Yen Factor”: A Sharp Reversal ntial market intervention. If the US and Japan were to step in together to support the Yen, it would send a loud and clear message: The Trump administration wants a weaker dollar. Even the threat of this has been enough to make traders nervous, sparking a “disruptive unwind” of carry trades—a scenario that looks a lot like the market chaos we saw in the summer of 2024. Trade Rhetoric and Policy U-Turns President Trump’s recent trade stance has also created a wave of uncertainty. However, it’s not all bad news for the global economy: A Change of Heart: The President recently dropped threats of higher tariffs on NATO allies like France, Germany, and the UK. Avoiding a Trade War: This rapid “U-turn” has actually helped ease fears of a global trade war, reducing the pressure on European economies and giving the Euro and Pound some room to breathe against the Dollar. What This Means for Investors The primary takeaway is that the “certainty” that drove the Dollar higher in early January has evaporated. Between the risk of intervention in Japan and unpredictable trade policies at home, investors are becoming much more cautious about holding US assets. Key Takeaway The US Dollar isn’t necessarily in a freefall, but it has certainly lost its crown for now. With the Is the Dollar’s Winning Streak Over? Why the Greenback is Losing Steam After a strong start to the year, the US Dollar’s momentum has hit a major roadblock. For the first time in weeks, the “Greenback” ended on a lower note, as investors start to second-guess the stability of US policy. According to the latest insights from MUFG analysts Lee Hardman and Abdul-Ahad Lockhart, the market is shifting from “buying the dollar” to “hedging against it.” Here is a look at the forces pushing the USD down.
There is growing chatter about potential market intervention. If the US and Japan were to step in together to support the Yen, it would send a loud and clear message: The Trump administration wants a weaker dollar. Even the threat of this has been enough to make traders nervous, sparking a “disruptive unwind” of carry trades—a scenario that looks a lot like the market chaos we saw in the summer of 2024. Trade Rhetoric and Policy U-Turns President Trump’s recent trade stance has also created a wave of uncertainty. However, it’s not all bad news for
The most dramatic move has been in the USD/JPY exchange rate. Just last Friday, the pair was trading as high as 159.23; by today, it had tumbled to a low of 153.40. Why the sudden drop? There is growing chatter about potential market intervention. If the US and Japan were to step in together to support the Yen,
the global economy: A Change of Heart: The President recently dropped threats of higher tariffs on NATO allies like France, Germany, and the UK. Avoiding a Trade War: This rapid “U-turn” has actually helped ease fears of a global trade war, reducing the pressure on European economies and giving the Euro and Pound some room to breathe against the Dollar. What This Means for Investors The primary takeaway is that the “certainty” that drove the Dollar higher in early January has evaporated. Between the risk of intervention in Japan and unpredictable trade policies at home, investors are becoming much more cautious about holding US assets. Key Takeaway The US Dollar isn’t necessarily in a freefall, but it has certainly lost its crown for now
