Asian Stocks Rally as Japan and South Korea Reach Record Highs on US-Iran Peace Deal 
China’s AI Manufacturing Boom Masks Weak Consumer Economy, Citi Says 
Japan Inflation Stays Below BOJ Target Despite Rate Hike and Rising Energy Cost Risks 
Fed Chair Kevin Warsh Signals Policy Overhaul as Hawkish Rate Outlook Rattles Markets 
Japan Signals Readiness to Intervene as USD/JPY Nears 161 Amid Yen Weakness 
Gold Prices Rebound on U.S.-Iran Peace Deal Optimism Despite Fed Rate Hike Signals 
Dollar Hits One-Month High as Hawkish Fed Outlook Boosts Greenback 
Canada Imposes 10% Tariff on Canned Vegetable Imports to Protect Domestic Industry 
US Stock Futures Jump on Reports of Preliminary US-Iran Peace Deal Despite Fed’s Hawkish Outlook 
US Stock Futures Slip After Wall Street Rally Fueled by US-Iran Deal and Chipmaker Surge 
Oil Prices Steady as U.S.-Iran Truce Uncertainty and Middle East Tensions Keep Markets on Edge 
Yen Near 40-Year Lows Despite BOJ Rate Hike, Markets Brace for Possible Intervention 
German Industry Employment Falls to Lowest Level in a Decade 
Italy’s Economy Outpaces Eurozone Peers as Investment Spending Fuels Growth 
Russia Stocks End Flat as MOEX Index Hits New 52-Week Low; Gold Falls and Oil Mixed 
Trump and Iran Sign Framework Peace Deal in France Amid Ongoing Middle East Tensions 
Oil Prices Slide as U.S.-Iran Deal and Hormuz Reopening Ease Supply Concerns 
The U.S. dollar began 2026 on a soft note, extending the weakness it showed throughout much of 2025, as currency markets continue to adjust to narrowing interest rate differentials between the United States and other major economies. Investors remain cautious ahead of key economic data and central bank developments that could shape the outlook for global interest rates this year.
After posting its sharpest annual decline in eight years in 2025, the dollar index hovered near 98.24 in early Asian trading. Last year’s drop was driven by U.S. interest rate cuts, uncertainty surrounding trade policy, and growing concerns about the Federal Reserve’s independence. As these factors persist into 2026, pressure on the greenback remains evident.
The euro held steady around $1.1752 after surging 13.5% in 2025, its strongest yearly gain since 2017. Sterling also remained firm near $1.3474, following a 7.7% rise last year. Both currencies benefited from improving sentiment outside the United States and the fading pace of rate cuts by other central banks, which reduced the dollar’s yield advantage.
The Japanese yen stabilized near 156.74 per dollar, close to a 10-month low that previously triggered intervention concerns from Japanese authorities. Although verbal warnings from Tokyo helped ease fears late last year, traders remain alert, especially as upcoming economic data could influence the Bank of Japan’s policy direction. With markets in Japan and China closed, trading volumes in Asia were subdued.
Looking ahead, investors are closely watching U.S. labour market data, including payrolls and jobless claims, for signals on where interest rates may head in 2026. Attention is also focused on who President Donald Trump will nominate as the next Federal Reserve Chair when Jerome Powell’s term ends in May. Markets expect a more dovish stance, with traders currently pricing in two U.S. rate cuts this year.
Meanwhile, commodity-linked currencies showed resilience. The Australian dollar edged higher near $0.6680 after its strongest annual performance since 2020, while the New Zealand dollar held steady around $0.5755, snapping a three-year losing streak in 2025.
