Forex Today: US Dollar hits four-month lows as Fed decision looms
Here is what you need to know on Tuesday, January 27:
The US Dollar (USD) collapsed on Monday on headlines indicating that the United States (US) Federal Reserve (Fed) asked banks in New York about their position sizes in USD/JPY, leading to speculation that the US may be preparing to work with Japan on the Japanese Yen’s (JPY) ongoing weakness. Concerns about JPY intervention fueled the USD sell-off.
The US Fed will announce its interest rate decision (currently 3.50%-3.75%) on Wednesday. While this is one of the last interest rate decisions with Jerome Powell leading the decision board, the market is on its toes as President Donald Trump decides on the next Fed Chair.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.47% | -0.36% | -1.05% | 0.08% | -0.51% | -0.69% | -0.61% | |
| EUR | 0.47% | 0.10% | -0.57% | 0.55% | -0.05% | -0.23% | -0.15% | |
| GBP | 0.36% | -0.10% | -0.65% | 0.45% | -0.15% | -0.33% | -0.25% | |
| JPY | 1.05% | 0.57% | 0.65% | 1.13% | 0.52% | 0.35% | 0.43% | |
| CAD | -0.08% | -0.55% | -0.45% | -1.13% | -0.60% | -0.77% | -0.70% | |
| AUD | 0.51% | 0.05% | 0.15% | -0.52% | 0.60% | -0.18% | -0.10% | |
| NZD | 0.69% | 0.23% | 0.33% | -0.35% | 0.77% | 0.18% | 0.08% | |
| CHF | 0.61% | 0.15% | 0.25% | -0.43% | 0.70% | 0.10% | -0.08% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The US Dollar Index (DXY) is trading near 97.00, a low it hasn’t seen since September 2025. The slip comes as investor sentiment remains downbeat despite US President Trump’s comments at the Davos summit last week regarding the US relationship with Europe and their battle over Greenland.
EUR/USD is trading near the 1.1880 price zone, a four-month high, as a weaker USD overshadows softer-than-anticipated Eurozone data. Germany published the January IFO survey, which showed that the Business Climate held at 87.6, worse than the 88.1 anticipated by market participants.
GBP/USD hovers around the 1.3690 level as a weaker USD pushes the pair up.
USD/CAD navigates the 1.3700 region, showing little movement as the pair awaits the Fed’s and the Bank of Canada (BoC) interest rate decisions on Wednesday.
AUD/USD remains well bid north of the 0.6930 mark, a level it hasn’t touched since September 2024, as the commodity-linked currency escorts Gold on its bullish journey.
USD/JPY challenges multi-month lows around 154.00 after Japan's Prime Minister Sanae Takaichi said on Sunday that the government will take necessary steps against speculative and abnormal market moves, further escalating intervention bets.
Gold flew through the $5,000 price region and is now sitting near its record high of $5,111 amid persistent geopolitical tensions between Greenland/Europe and the US.
What’s next on the docket:
Tuesday:
- ECB's President Christine Lagarde's speech .
- US Consumer Confidence for January.
Wednesday:
- Bank of Canada Interest Rate Decision (current 2.25%, expected to hold).
- Australia's monthly and quarterly CPI.
- US FOMC Interest Rate Decision (current 3.50%-3.75% expected to hold).
- US Advance Durable Goods Orders.
Thursday:
- US Initial Jobless Claims.
- US Personal Income and PCE Deflator.
Friday:
- Eurozone Q4 GDP (Flash estimate).
- Germany Q4 GDP (Flash estimate).
- Tokyo CPI (January).
(This story was corrected on January 26 at 19:58 GMT to fix the date of the FOMC interest rate decision, which will take place on Wednesday, and to remove the US Durable Goods, as it was released on Monday.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Author
Agustin Wazne
FXStreet
Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.
