Meta description: U.S. dollar slides sharply after Trump’s comments; gold hits record highs and equities react, shifting FX, commodities, and risk sentiment.

The move in one paragraph

On January 28, 2026, financial markets saw a notable selloff in the U.S. dollar, with the DXY Index tumbling to multi‑year lows, while gold prices surged above record levels, and global equities broadly climbed, led by risk assets. The dollar’s decline was the sharpest in weeks after comments from U.S. President Donald Trump dismissing recent weakness, triggering a powerful FX move and sparking repositioning in commodities and equities. The euro surpassed $1.20, the Australian dollar hit a three‑year high above $0.70, and Brent crude approached four‑month highs near $67.98/bbl as dollar‑denominated commodities rallied. Treasury yields remained relatively stable, while Bitcoin lagged, reinforcing a narrative of policy‑linked risk asset rotation.

Numbers that matter

  • USD Index (DXY) slide: Near four‑year lows on January 28, a sharp decline in the U.S. dollar that lifted G10 FX and EM FX alike, illustrating currency volatility.
  • Euro above $1.20: A critical technical threshold, indicating broad dollar softness and strengthening European FX flows.
  • AUD > $0.70: Australian dollar reached a three‑year high, reflecting commodity‑linked FX strength as the dollar wobbled.
  • Gold > $5,241/oz: Spot gold spiked to multi‑year highs on haven demand amidst dollar weakness and geopolitical noise.
  • Brent crude ~ $67.98/bbl: A four‑month high for oil that signals bullish commodity prices on a weak dollar.
  • Treasury 10‑yr ~ 4.233%: Stable yields amid FX moves indicate selective risk flows rather than full risk‑off panic.
  • S&P 500 at record highs: U.S. equities continued upward momentum despite FX and political headlines, highlighting selective risk appetite.
  • Bitcoin < $90,000: A lag in crypto performance versus traditional commodities and equities, suggesting nuanced risk preferences.

What changed (the catalyst)

The catalyst driving these moves was a mixture of U.S. dollar weakness after remarks by President Donald Trump and continued geopolitical and policy uncertainty that shifted capital flows. Reuters reported the President’s comment that “Dollar’s doing great” paradoxically intensified selling pressure on the U.S. currency as markets interpreted it as downplaying recent weakness and hinting at political interference in economic policy.

The dollar’s fall was the sharpest since prior tariff shocks, highlighting market sensitivity to unexpected rhetoric from the U.S. administration. This FX shift occurred ahead of a Federal Reserve policy meeting expected to hold rates steady, further complicating the narrative around rate differentials and global capital flows. The combination of political comments and central bank expectations created an immediate repricing of risk assets, especially in foreign exchange and commodities.

Gold’s surge above $5,241 an ounce reflects how traders reacted to the dual forces of a weaker dollar and elevated uncertainty, treating precious metals as a haven. Brent crude’s ascent toward $67.98 per barrel shows how dollar weakness typically supports commodity prices, as crude becomes cheaper for buyers using other currencies.

How markets reacted

Cross-asset read-through

FX and rates: The sharp decline in the dollar had immediate FX implications. The euro’s advance above $1.20 and the AUD’s surge above 70 cents highlighted broad G10 FX strength, while emerging market currencies and commodity FX also rallied. The relative stability in U.S. Treasury yields (10‑year around 4.233%) amid these moves suggests that rate markets did not view the dollar selloff as signalling a macro downturn but rather a repositioning around global liquidity and funding dynamics.

Commodities: A weaker dollar typically supports commodity prices, and Brent crude climbing near four‑month highs, as well as gold surpassing record levels, reflect this relationship. Gold’s haven status was further amplified by supply uncertainties and geopolitical noise that underlie investor flows into safe assets. Currency‑linked commodity demand shifts often materialize when dollar funding becomes less attractive relative to other funding channels.

Equities & crypto: Equities, especially the S&P 500 (record highs) and Hong Kong’s Hang Seng (multi‑year high), reacted positively—an indication that risk‑asset demand remained intact despite FX moves. However, crypto such as Bitcoin remaining below $90,000 suggests that the risk rally was more concentrated in traditional assets and commodities rather than in higher‑beta digital assets.

Positioning and liquidity (if relevant)

The rapid dollar slide and correlated commodity rise appear consistent with a positioning unwind in FX carry trades and reallocation toward hard assets, rather than a broad “risk‑off” de‑risking. Thin liquidity ahead of major central bank days often amplifies these moves, while options markets can exacerbate directional flows as implied vol spikes in FX lead to hedge repricing across currencies and commodity exposures.

Context you need (not a history lesson)

Before this week’s action, markets were pricing a Federal Reserve hold at its January 28–29 meeting, with little immediate push for hawkish changes but caution around forward guidance. The prevailing narrative had been focused on mega‑cap earnings and tech sector leadership injecting confidence into equities.

The key shift this week has been the renewed policy and political risk premium embedded into currency pricing, spurred by Trump’s rhetoric and perceived threats to central bank independence—a theme seen earlier in January when markets reacted to legal pressure around Fed leadership.

This event also echoes past episodes where FX volatility surged on unexpected political comments, reminiscent of tariff‑linked dollar moves and subsequent commodity rallies seen in late 2025. However, the current case is distinct in combining political rhetoric with a tangible shift in safe‑haven flows (gold) while maintaining equity records.

What traders will watch next

  • Fed policy outcome (Jan 28–29, 2026): If the Fed pushes back on political narratives and emphasizes independence, dollar stability could return.
  • U.S. CPI and jobs metrics: Even if not imminent, upcoming inflation and labor data will be scrutinized for changes in rate expectations and yield curve responses.
  • FX technical levels: Dollar stops around DXY 101–102 and the next support zone; euro’s resistance near $1.22 are critical.
  • Gold and commodity price levels: Gold support around $5,000 and Brent’s next resistance near $70/bbl can signal whether commodity rallies broaden or fade.
  • Equity sector flows: Rotation from tech to cyclicals or commodities amid FX shifts will be a live cross‑asset signal.
  • Emerging markets flows: EM FX and bond spreads could reveal broader risk appetite or stress.
  • Options and funding costs: Implied FX vols and FX funding spreads can show if positioning is reverting or extending.

Bottom line

The confluence of political rhetoric, dollar weakness, and haven demand has created a market environment where FX and commodities have led, while equities remain supported by earnings optimism. This multi‑asset response underscores that traders are balancing risk premiums across currencies, commodities, and equities simultaneously. If central banks reaffirm policy independence and guide pricing expectations clearly, the current volatility may moderate—otherwise, risk premia in FX and safe havens could stay elevated.