Fed Credibility Risk Sends 10-Yr Yield Above 4.2, Euro to Benefit as Dollar Alternative?.With the economic calendar nearly empty, markets are fixated on the escalating political risk surrounding Fed Chair Jerome Powell, who is now under federal criminal investigation linked to the renovation of the Fed's headquarters and his congressional testimony on the matter. The move has taken markets by surprise, particularly given that Powell's term as Fed Chair is due to conclude in May.

USD/JPY Price Forecast: 158.00 caps upside as the pair consolidates near January 2025 highs.USD/JPY Price Forecast: 158.00 caps upside as the pair consolidates near January 2025 highs

investingLive European markets wrap: Dollar slips, precious metals surge on Fed threats.The main headlines to start the week is Trump's continued attack on Fed independence, as Powell is put under criminal investigation in a bid by the administration to try and bend the central bank to its will. Powell's press conference was quite something and if you watched it without context, you might even think it was scripted and AI-generated.

USD: Next Fed Chair announcement to impact markets – Rabobank.USD: Next Fed Chair announcement to impact markets – Rabobank

USD/JPY: 158.90 is likely out of reach today – UOB Group.USD/JPY: 158.90 is likely out of reach today – UOB Group

Goldman Sachs sees 10-year Treasury yields rising despite Fed rate cut odds.In a report on Monday, Goldman Sachs is expecting 10-year Treasury yields to rise to 4.40% by the end of 2026 citing a US economy which will continue to stay underpinned.

Sterling rallies vs dollar, flat against euro as risk premium unwinds.Sterling rallied against the U.S. dollar on Monday, alongside the euro and the Swiss franc, after the Trump administration threatened Federal Reserve Chair Jerome Powell with a criminal indictment.

USD/JPY trades close to yearly high near 158.20 amid Trump-Powell feud.USD/JPY trades close to yearly high near 158.20 amid Trump-Powell feud

Oil News: Crude Oil Futures Stall as Oversupply Clashes With Iran Supply Risks.Crude oil futures stall after a 50-day moving average breakout as oversupply caps gains despite Iran supply disruption speculation. Oil outlook remains mixed.

Morning Bid: Powell pulls no punches.What matters in U.S. and global markets today

Eurozone Sentix jumps to six-month high, recovery optimism builds.Eurozone investor confidence improved at the start of the year, with Sentix Investor Confidence Index rising from -6.2 to -1.8 in January, well above expectations of -5.1 and the strongest reading since July. The rebound was broad-based, with the Current Situation Index climbing from -16.5 to -13.0 and the Expectations Index jumping from 4.8 to 10.0, both also six-month highs.

Rupee ends flat, caught between softer dollar and corporate hedging.The Indian rupee closed nearly ‍flat on Monday, wedged ​between a broadly weaker dollar and steady hedging demand from ⁠domestic firms, while optimism over U.S.-India trade talks offered some support to market sentiment. The rupee closed at 90.1525 per dollar, little changed from 90.1625 in the previous session.

USD/JPY Stalls Near One-Year High.The USD/JPY pair paused on Monday after a sharp rally to around 157.95, with the yen holding near its lowest levels of the year. Trading activity was subdued as Japanese markets were closed for a public holiday.

Dollar Index (DXY) Turns Lower.Capital flows into gold amid rising geopolitical and broader market risks, together with Jerome Powell's remarks about potential criminal prosecution, have not only driven XAU/USD to record highs (as discussed earlier today) but have also put pressure on the US Dollar Index (DXY).

US, Iran, and Middle East Risks Lift WTI Near $60.Following Maduro's fall earlier this year, Trump's regime-change focus has shifted toward Iran, where thousands are marching in the streets, raising the risk of regional escalation and potential crude supply disruptions. Iran remains OPEC's fourth-largest oil producer, and while a positive reform combined with eased sanctions could allow additional supply to return to the market, a non-peaceful transition would likely trigger retaliatory risks across the region, increasing crude supply uncertainty.

USD: Political threats rattle Fed, USD and Treasuries fall – BBH.USD: Political threats rattle Fed, USD and Treasuries fall – BBH

EUR/JPY rises on improved Eurozone sentiment, Japanese political uncertainty.EUR/JPY rises on improved Eurozone sentiment, Japanese political uncertainty

Goldman Sachs chief economist says Fed decisions will not be swayed by Powell criminal probe threat.Goldman Sachs' chief economist Jan Hatzius said on Monday that a criminal indictment threat facing the Federal Reserve chairman would reinforce central bank independence worries, but he expected the Fed to continue to make decisions based on data.

US: Downside surprises in December payrolls and unemployment rate – UOB Group.US: Downside surprises in December payrolls and unemployment rate – UOB Group

USD/JPY Inside the 158.00-159.00 Resistance Zone. Is A Reversal Imminent?.The USD/JPY forex pair last broke into 160.00 in mid-2024. We discuss the odds of a repeat ahead of Japan's snap elections.

USD/JPY eyes breakout above recent range – Société Générale.USD/JPY eyes breakout above recent range – Société Générale

Eurozone Sentix Investor Confidence improves to -1.8 in January vs. -6.2 prior.Eurozone Sentix Investor Confidence improves to -1.8 in January vs. -6.2 prior

GBP/JPY Price Forecast: Pound steadies at long-term highs above 212.20.GBP/JPY Price Forecast: Pound steadies at long-term highs above 212.20

The market is telling Trump to stop interfering with Federal Reserve independence.The main news of the day today is the US Department of Justice subpoenaing the Federal Reserve in an unprecedented move that escalates the ongoing conflict between President Trump and Fed Chair Powell for not lowering interest rates faster.

RBI Intervention Anticipated as Indian Rupee Weakens Against Dollar.Summary:USD/INR is trading near the 90.20–90.25 zone as RBI intervention expectations rise The rupee remains under pressure from higher crude prices and foreign investor outflows Recent declines in India's forex reserves have intensified speculation of central bank action The technical structure keeps USD/INR supported while below-term momentum coolsUSD/INR is holding near the 90.20–90.25 area in early Monday trade as the Indian rupee remains under pressure and RBI intervention becomes a central theme for currency markets. The rupee opened weaker at […]

Pound Sterling rises as criminal charges against Fed Powell weighs on US Dollar.Pound Sterling rises as criminal charges against Fed Powell weighs on US Dollar

Investors anxious over make-or-break fight for the Fed.A U.S. Justice Department investigation at the Federal Reserve and a combative response by chair Jerome Powell have sharply raised the stakes in a long-running dispute that has put the independence of the world's most powerful central bank openly on the line, investors said.

Fed Chair's Forceful Reaction Marks a Clear Escalation in Fight on Central Bank Independency.Chances had already become quite slim and Friday's US eco data rubberstamped markets' feeling that the Fed has good reason to wait for clearer directional evidence that the economy is weakening and/or is inflation is moving decisively closer to target before further easing policy. Indeed, US December payrolls with monthly job growth at 50k (vs 70k expected) was no ‘grand cru'.

AUD/JPY advances to fresh high since July 2024; eyes 106.00 amid a weaker JPY.AUD/JPY advances to fresh high since July 2024; eyes 106.00 amid a weaker JPY

Powell Investigation Casts Spotlight on Fed.In the euro area, the Sentix indicator is released today, providing the first estimate of investor confidence in 2026. While confidence improved in 2025 compared to 2024, it ended the year on a downward trajectory.