January 28 Market Watch: Dollar Breaks Below 96, Fed Meeting Approaches

marsbitPublished on 2026-01-28Last updated on 2026-01-28

Abstract

Dollar Index Falls Below 96, Hits Three-Month Low Amid Fed Meeting Anticipation On January 28, the dollar index dropped 0.84% to 96.219, falling below the 96 mark and hitting a three-month low. The decline is part of a broader weakening trend since early 2026, with a cumulative loss of nearly 7%. Former President Trump’s comments endorsing the dollar’s performance added further pressure. Markets are closely watching the upcoming Fed meeting, where rates are expected to remain unchanged at 3.50%–3.75%. However, attention is on Chair Powell’s stance amid political pressure and threats of a criminal investigation by the Justice Department. Structural issues underlie the dollar’s weakness: its share in global forex reserves has fallen below 60%, while gold’s share rose to 25.94%. Trump’s tariff policies are further eroding dollar credibility, signaling a shift away from dollar dominance. Gold held above $5,000, briefly surpassing $5,200, with central banks—including China’s—continuing to accumulate gold. Silver rose over 5%, exceeding $110/oz, though some funds halted subscriptions, suggesting overheating. Institutional views are mixed, with Citi bullish on silver and others cautious on short-term gold pressures. U.S. stocks were mixed: tech gains lifted the Nasdaq, but healthcare stocks plunged, dragging down the Dow. Market focus includes potential Fed leadership changes and government shutdown risks. Small caps are outperforming, reflecting a rotation away from high-value ...

Written by: Mamengniu, Deep Tide TechFlow

Dollar Index: Breaks Below 96, Hits Three-Month Low

On Monday, the dollar index fell sharply by 0.84%, closing at 96.219, breaking below the 96 mark and hitting a three-month low. This is a continuation of the dollar's sustained weakening trend since early 2026, falling from around 103 points at the beginning of the year, with a cumulative decline of nearly 7%.

This is also thanks to Trump's efforts. On Tuesday, when asked whether he thought the dollar had fallen too much, Trump said the dollar's performance was "very good." Trump's remarks increased pressure on the dollar, and the exchange rate subsequently fell to a near four-year low.

Additionally, the market is holding its breath for the Federal Reserve's interest rate meeting on January 29. All economists unanimously expect the Fed to keep interest rates unchanged at 3.50%-3.75%, but the real focus is on Powell's stance. Under the pressure of the Trump administration (the Justice Department has even threatened to launch a criminal investigation against Powell), how the Fed chairman balances policy independence and market expectations will directly affect the dollar's subsequent trend.

Behind the dollar's weakness are structural issues: the dollar's share of global foreign exchange reserves has fallen below 60%, while the share of gold reserves has risen to 25.94%. Trump's tariff policies (threatening to impose 100% tariffs on Canada and raising tariffs on South Korea to 25%) have further weakened the dollar's credibility. The market is witnessing the return of the "dollar privilege" to a "normal currency."

Precious Metals: Gold Stabilizes Above $5,000, Silver Suspends Subscriptions

Spot gold stabilized above $5,000, once breaking through $5,200. The share of gold in foreign exchange reserves rose to 25.94% in January 2026, hitting a record high. The People's Bank of China has been increasing its gold reserves for 14 consecutive months, indicating an acceleration in the global "de-dollarization" trend.

Silver rose more than 5% on Monday, breaking through $110/ounce. Retail demand in China and India is strong, and manufacturers have shifted production from silver jewelry to investment products. It is worth noting that the SDIC Silver Futures Fund suspended subscriptions from January 28, which is usually a signal of an overheated market.

Institutional views are divided: Citi is bullish on silver, targeting $120, while CICC warns that if geopolitical risks do not escalate, gold may face short-term pressure, but the room for adjustment is limited. Huaxi Securities predicts that gold prices may rise between 10% and 35% in 2026.

U.S. Stocks: Tech Stocks Diverge, Healthcare Sector Plunges

U.S. stocks opened with clear divergence on Monday, with the Dow down 0.62%, the Nasdaq up 0.57%, and the S&P 500 up 0.27%. The tech sector performed strongly, with Apple up 3%, Meta up 2.1%, and Microsoft up 0.9%. However, healthcare plan stocks led the declines, with UnitedHealth plunging nearly 17%, Humana down over 16%, and CVS Health down nearly 10%, dragging down the Dow.

This was the last trading day before the Fed's interest rate meeting on January 28. The market is digesting two key pieces of information: first, Trump may appoint a new Fed chairman this week (Powell's term ends in May), and second, the risk of a government shutdown is heating up again.

In 2026, U.S. stocks showed a clear style rotation: the small-cap Russell 2000 index outperformed the S&P 500 for 14 consecutive days, the longest winning streak since 1996. Investors are shifting from AI tech giants to defensive sectors and small-cap stocks, reflecting concerns about overvalued tech stocks and the profitability of AI—capital expenditure by Microsoft, Alphabet, Amazon, and Meta is expected to grow 34% to $440 billion, but the return cycle remains unclear.

Bridgewater founder Ray Dalio bluntly stated that the AI boom is in the "early stages of a bubble." The market is waiting for an answer: after three years of a bull market, can AI continue to drive the index to new highs?

Cryptocurrency: Struggling in the Shadow of Precious Metals

Bitcoin and Ethereum continue to face pressure. The market is voting with its feet: when real safe-haven demand arises, funds flow to millennia-old precious metals rather than over-a-decade-old cryptocurrencies. The "digital gold" narrative appears particularly pale in comparison to silver's over 50% gain and gold's 17% rise this year.

Another change is that various exchanges are intensively launching trading pairs for U.S. stocks and precious metals. Where liquidity is, attention is. Cryptocurrencies are still consolidating, waiting for a recovery.

Core Logic: Restructuring of the Credit System

The essence of this round of market changes is the structural contraction of the dollar credit system. When the Trump administration disrupts the global order through tariff policies, and when the Justice Department threatens to investigate the Fed chairman, the market is repricing the long-term value of the dollar.

The Fed's interest rate meeting will reveal how policymakers respond to this dilemma: continuing to cut rates may trigger inflation and dollar depreciation, but maintaining high rates may harm the economy. This lack of a "risk-free path" is the biggest uncertainty in the current market.

Risk Warning: Precious metal volatility intensifies, silver correction risk rises; the dollar may technically rebound due to Fed's "hawkish" stance; cryptocurrency liquidity is fragile.

This article is for market observation only and does not constitute investment advice.

Related Questions

QWhat was the performance of the U.S. dollar index on Monday, and what key level did it break?

AThe U.S. dollar index fell 0.84% on Monday, closing at 96.219 and breaking below the 96 level, hitting a three-month low.

QWhat is the main focus of the market regarding the upcoming Federal Reserve meeting on January 29th?

AThe main focus is not on the expected decision to keep interest rates unchanged, but on Chairman Powell's statements and how he will balance policy independence with market expectations under political pressure from the Trump administration.

QWhat significant milestone did gold reach, and what trend does the continuous gold buying by the Chinese central bank indicate?

ASpot gold stabilized above $5,000, even breaking through $5,200 at one point. The Chinese central bank has been increasing its gold reserves for 14 consecutive months, indicating an acceleration in the global 'de-dollarization' trend.

QAccording to the article, what is the core logic behind the current market changes?

AThe core logic is the structural contraction of the U.S. dollar credit system, driven by the Trump administration's tariff policies disrupting global order and the threat of a Justice Department investigation into the Fed Chair, leading markets to reprice the long-term value of the dollar.

QWhat was the performance of the healthcare sector in the U.S. stock market on Monday, and which stocks were mentioned as major decliners?

AThe healthcare sector led the declines. Specifically mentioned stocks were UnitedHealth, which plunged nearly 17%, Humana, which fell over 16%, and CVS Health, which dropped nearly 10%.

Related Reads

As Consensus Accelerates, What Are Young Investors Betting On?

Title: As Consensus Forms Faster, What Are Young Investors Betting On? In the rapid evolution of tech investment, a new generation of young investors is navigating a landscape where AI, robotics, commercial aerospace, and quantum computing are advancing simultaneously. Traditional investment logic based on financial models is giving way to a need for deep technical understanding and the ability to act before industry consensus forms. An analysis of trends from the "WAIC FUTURE TECH" list of young investment leaders reveals key shifts in focus. The first major trend is the movement of AI from the digital screen into the physical world. Investment is shifting from large language models and chatbots towards embodied AI, robotics, AI hardware, and edge computing. While demonstrations generate excitement, the real challenge lies in achieving scalable, reliable, and cost-effective delivery in complex real-world environments like factories and logistics. Success depends not just on algorithms but on the integration of sensors, actuators, and control systems. Second, the competitive focus for large models is moving beyond raw capability toward building an "intelligence flywheel." The goal is to create self-reinforcing systems where user interaction generates data, improving the model, which in turn enhances the user experience and attracts more engagement. Companies that successfully embed AI into workflows to create these closed-loop systems can build lasting value that isn't easily erased by the next model upgrade. Third, facing a potential bottleneck in high-quality human-generated data, investors are looking at new underlying technologies. Reinforcement learning and self-play, as demonstrated by AlphaGo Zero, offer paths for AI to generate its own experience. Scientific foundation models, which aim to build general AI capabilities for fields like life sciences and materials discovery, represent a non-consensus direction that could unlock new frontiers of knowledge and data. Finally, in deep-tech areas like quantum computing, commercial aerospace, and space-based infrastructure, patient capital is essential. These fields have long, uncertain development and validation cycles involving complex engineering, supply chains, and regulations. Investment here requires a long-term view, focusing on foundational team capabilities and the eventual emergence of market demand, even if commercial returns are distant. Collectively, these trends illustrate how young investors are adapting to a new era. They are learning to make earlier, technically-informed judgments, balance hype with real-world viability, and provide the patient capital needed to build the deep-tech foundations of the future.

marsbit17m ago

As Consensus Accelerates, What Are Young Investors Betting On?

marsbit17m ago

Unlocking $100 Million in Liquidity? Pump.fun's New Policy Tests the 5-Minute Pump Technique

Foresight News, July 21 – Pump.fun has launched its new "BOOST" mode as the standard launch mechanism for new tokens. The core of BOOST is to address the issue of "dead liquidity." Historically, when a token migrates from its bonding curve to a liquidity pool, roughly 20% of its liquidity becomes permanently locked and unusable, a problem the platform estimates costs over $100 million annually. The new mechanism redirects this 20% of funds, which would have been locked, to instead be used for a 5-minute Time-Weighted Average Price (TWAP) buyback of the token immediately after migration. The purchased tokens are then permanently burned. For example, this means reserving 17.6 SOL for SOL pairs or about $2516 for USDC pairs at migration. This creates a short-term buying pressure and reduces the token's supply. The goal is to improve the immediate post-launch performance of memecoins, potentially increasing trader retention and transaction volume on the platform. However, critics warn this could lower the bar for token launches, encouraging low-quality projects, and that the brief 5-minute buy pressure might lead to sharper price crashes once it ends if followed by large sell-offs.

Foresight News26m ago

Unlocking $100 Million in Liquidity? Pump.fun's New Policy Tests the 5-Minute Pump Technique

Foresight News26m ago

What Signals Can Be Read from the Trading Data of India's Largest Asset Manager SBI's IPO?

India's largest asset manager, SBI Funds Management, successfully listed on July 21 with a nearly $10 billion IPO, attracting approximately 42 times subscription. However, the first-day closing price rose only about 6.3%, falling short of the 16% premium anticipated in the grey market. This signals robust demand for core Indian financial assets but also disciplined pricing, indicating the IPO market is selectively open for strong brands with clear growth narratives. The low reported underwriting fees, which led some global banks to reduce participation, highlight a shift in pricing power towards powerful issuers like SBI. Its strong brand, banking parent, and stable cash flows reduced reliance on traditional investment banking sales channels, with local brokers playing a larger role. This fee dynamic may not be replicable for weaker issuers. SBI's performance is seen as a key test for India's IPO pipeline, including potential future large listings like Reliance Jio and NSE. Its success with tempered gains sets a new price anchor: high-quality assets can launch, but excessive valuation premiums are constrained. The true measure of a sustained market reopening will be whether subsequent major offerings can proceed smoothly at reasonable valuations.

marsbit44m ago

What Signals Can Be Read from the Trading Data of India's Largest Asset Manager SBI's IPO?

marsbit44m ago

Can Japan Buy Growth with AI? Will the Bond Market Believe It?

Japan's cabinet has introduced the 2026 Basic Policy on Economic and Fiscal Management and Reform, shifting its primary fiscal target. The new framework moves away from the traditional annual primary balance goal and instead prioritizes a stable reduction of the debt-to-GDP ratio. This change is tied to a strategy of increased "responsible proactive fiscal" spending, aiming to boost long-term growth through investments in strategic sectors like AI, semiconductors, energy, and robotics. The government estimates total public and private investment in 62 key technologies could exceed 370 trillion yen by 2040. The market reaction has been mixed and cautious. While equity markets may respond to policy signals, bond markets are focused on fiscal credibility. Concerns center on whether the weakening of the clear primary balance anchor could lead to looser fiscal discipline. If investors doubt that these strategic investments will generate sufficient productivity gains, tax revenue, and nominal growth to outpace rising interest costs, they may demand higher yields on Japanese Government Bonds (JGBs). Recent volatility in the yen and JGB yields, with the 10-year yield briefly reaching 2.9%, reflects this skepticism. The success of this new framework hinges on two factors: whether Japan can achieve a nominal growth rate consistently higher than its long-term interest rates, and whether future budgets demonstrate disciplined control over bond issuance. The government's narrative is that strategic investment is essential to break Japan's cycle of low growth, aging, and labor shortages. However, the bond market will continuously assess the credibility of this plan, pricing the risk that it may represent fiscal expansion rather than a viable growth strategy.

marsbit54m ago

Can Japan Buy Growth with AI? Will the Bond Market Believe It?

marsbit54m ago

Misjudged A-Shares: Resilience, Expectations, and Confidence

China's A-share market recently faced selling pressure, especially in tech sectors, initially triggered by a global tech sell-off that began in South Korea. However, the article argues this is a case of "mistaken injury" and highlights the market's underlying resilience. This resilience stems from three main pillars: **1) Tech Sector Fundamentals:** Unlike Korea's market dominated by a few memory chip stocks, China's tech sector is diversified across computing, communications, electronics, and semiconductors, supported by dual narratives of global AI supply chains and domestic substitution. Core areas like optical modules and fiber optics continue to show strong earnings growth. **2) "National Team" Support:** State-backed institutions and large corporations have made significant market purchases and announced buybacks, providing liquidity and signaling confidence. This is seen as a stabilizing policy signal, often associated with market bottoms. **3) Broader Market Pillars:** Other major sectors are showing endogenous recovery momentum. Consumer stocks benefit from stabilizing CPI and signs of sector recovery (e.g., liquor price hikes). Cyclical sectors like aluminum have high earnings, potential price increases due to tight supply, and low valuations. The financial sector offers stable dividends and low valuations. The conclusion is that the sell-off was driven by external contagion, not a collapse in fundamentals. With strong policy support and recovering momentum across key sectors, the A-share market possesses the toughness to regain stability.

marsbit1h ago

Misjudged A-Shares: Resilience, Expectations, and Confidence

marsbit1h ago

Trading

Spot
活动图片