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📰 Focus on the U.S. Dollar

📰 Focus on the U.S. Dollar

— Fed leadership nomination and the U.S. stopgap budget deadline take center stage —

🧭 Market Overview

Over the weekend, global markets are expected to be driven primarily by movements in the U.S. dollar.
In today’s Tokyo session, dollar buying has been dominant, triggered by reports surrounding the U.S. Federal Reserve leadership appointment.

Bloomberg reported that:

“Trump is expected to nominate Kevin Warsh as the next Fed Chair.”

The market reacted immediately to this headline.

🏦 Fed Chair Nomination: Impact of the Warsh Report

  • Warsh is known as a hawkish figure from his time as a Fed Governor.

  • President Trump has been advocating for aggressive rate cuts, making this choice somewhat surprising.

That said:

  • His policy stance could still change

  • The nomination itself is not yet confirmed

As a result, the current move is largely expectation-driven.

📌 There is a possibility that President Trump makes an official announcement later today, and depending on the final decision, the dollar could swing sharply either higher or lower.

🏛 U.S. Stopgap Budget Deadline: Political Risk in Parallel

Today is also the deadline for the U.S. stopgap funding bill.

  • Media reports suggest a “tentative agreement” between Trump and Democrats

  • However:

    • The House is in recess until Monday

    • A weekend session is highly unlikely

👉 This makes a temporary funding lapse a realistic scenario.

That said:

  • If post-deadline measures are implemented swiftly,
    → the economic impact may be smaller than during previous shutdowns.

📉 From a market perspective:

“Confirmation of a funding lapse → initial dollar selling”

is the typical reaction to watch for.

🇯🇵 Yen Outlook: Caught Between Elections and Intervention Risk

The yen remains firmly in a politically driven market, tied to Japan’s upcoming lower house election.

When yen weakness accelerates:

  • Rate-check rhetoric

  • Actual intervention

quickly return to the forefront of market psychology.

📌 The 155 level in USD/JPY is a key threshold where market sensitivity rises sharply.

📊 Today’s Key Economic Data (Expected Market Impact: Limited)

While there are many data releases, market attention remains focused on U.S. political developments, limiting the lasting impact of economic indicators.

Europe

  • France GDP (Q4 preliminary)

  • Germany employment (January)

  • Germany GDP (Q4 preliminary)

  • Eurozone GDP (Q4 preliminary)

  • Germany CPI flash (January)

North America & Emerging Markets

  • Canada GDP (November)

  • U.S. PPI (December)

  • U.S. Chicago PMI (January)

  • Brazil employment data

  • Mexico GDP (Q4 preliminary)

🎤 Speeches & Events

  • Report on foreign exchange interventions
    (Dec 29, 2025 – Jan 28, 2026)
    → Will reveal whether actual yen-buying intervention occurred during last week’s move

Late New York session

  • Musalem (St. Louis Fed President)

  • Miran (Fed Governor)

  • Bowman (Fed Vice Chair)

🪙 Commodities: Silver Plunges

  • Spot silver price

    • Previous high: $121.65 (all-time high)

    • Today’s low: early $95 area

    • 👉 A sharp decline of over 21%

🔎 Summary – Key Takeaways

Two dominant themes

  1. Fed Chair nomination (Is it Warsh or not?)

  2. Risk of a U.S. stopgap budget lapse

U.S. Dollar

  • Highly sensitive to the leadership decision

  • Vulnerable to near-term selling if funding expires

Japanese Yen

  • Remains nervous due to election uncertainty and intervention risk

Silver & Precious Metals

  • Entering a cooling-off / correction phase after extreme overheating

This is a market where politics, not data, is setting the tone.

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