USD: Dollar weakness drives lower risk score – DBS

FXStreet Insights Team FXStreet

DBS Group Research highlights that its FX risk score has fallen to the lowest level since late 2021, driven mainly by a weaker US Dollar in early 2026 after a 9.4% depreciation in 2025. Economists Chua Han Teng and Daisy Sharma note that concerns over US Fed independence, US exceptionalism and fiscal sustainability continue to weigh on the Dollar.

FX risk score falls on softer Dollar

"This week’s featured insight is our Asset Risks Dashboard, which track conditions and gauge risk sentiments across four key asset classes (Equities, Interest Rates, Credit, and FX). Today we focus on FX."

"The FX risk score has trended lower in early 2026 to its lowest level since late 2021."

"The increasingly benign level primarily reflects a weaker US dollar at the start of this year, having already depreciated by 9.4% in 2025."

"This continues to be due to worries surrounding the US Fed’s independence (despite the announcement of Kevin Warsh as the new Fed Chair), investor concerns regarding US exceptionalism, long-term fiscal sustainability, and ongoing policy uncertainties."

"US funding conditions remain comfortable in the Euro and Japanese markets, although with slight tightening bias."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold keeps the bid tone in place; still below $4,400

Gold adds to the optimism seen in the second half of the week, trading with decent gains just below the $4,400 mark per troy ounce on Friday. The precious metal’s advance finds traction in declining crude oil prices and fresh selling pressure on the US Dollar.

Why altcoin season isn't coming back — and what stole its capital

If, after two years of being frozen in ice, Katara and Sokka woke you up to the crypto market, it would seem like 100 years have passed. With Bitcoin soaring to record highs just over a year ago, everyone expected a routine altcoin season, where investors take profits from the top crypto to chase higher returns in altcoins.

BoJ Recap: Not as hawkish as expected

The BoJ raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks. Governor Kazuo Ueda said the policy phase had changed.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.