The U.S. dollar weakened sharply after news broke
U.S. Dollar Weakness on Powell Investigation
The U.S. dollar weakened sharply after news broke that U.S. prosecutors have launched a criminal investigation into Federal Reserve Chair Jerome Powell, raising serious questions about the independence of the central bank.
This development triggered the largest dollar decline in three weeks, with gold prices surging to record highs as traders sought safe havens.
Markets are now watching for how this political/legal tension could influence future Fed monetary policy and interest rate expectations.
Euro-area investor confidence improved more than expected in January, according to the Sentix index — a bullish signal for euro-related FX fundamentals, though conditions still remain recessionary.
Strengthening sentiment could influence EUR pairs if confirmed by upcoming data.
What’s Scheduled for Forex Traders Today
According to major economic calendars, the following data and events may influence market volatility on Jan 12, 2026:
Europe / Euro (EUR)
German/Eurozone current and financial account balances (late night GMT) — impacts EUR funding flows.
Other Eurozone balance, trade and production data may filter through FX markets.
Japan / Yen (JPY)
BoP (Balance of Payments) and current account figures — can move JPY especially in Asian session markets.
United States / USD
U.S. Treasury auctions and Fed officials speaking (Barkin, Williams) later in the U.S. session — may affect USD sentiment and yield-linked currency pairs.
Bill auctions and note auctions also scheduled today (these can subtly shift yield expectations and influence USD pairs).
Other
Medium to low-impact releases across AUD, CHF, and NZD through the day.
Note: No high-impact U.S. CPI or Nonfarm Payroll figures are scheduled today — those are expected tomorrow and later this week, which markets are already pricing in.
Broad risk sentiment is cautious due to geopolitical uncertainty (including tensions in the Middle East and political pressure on monetary authorities).
Traders are shifting toward safe-haven assets (gold, JPY) and awaiting confirmation from economic data before committing directionally in major FX pairs.
Given today’s context:
USD/JPY — sensitive to safe-haven flows and BOJ-related data outcomes.
EUR/USD — potentially supported by European sentiment uptick vs. broad USD weakness.
Gold vs. USD pairs — gold strength often correlates with USD softness, which can affect AUD, NZD, and other commodity–linked FX pairs.
Risk sentiment pairs (AUD/USD, GBP/USD) — may react to broader equity and interest rate expectations.
Short-term focus
Expect volatility around USD sentiment and gold markets given the Powell investigation headlines.
Positioning ahead of tomorrow’s CPI release is increasingly relevant.
Medium-term view
Macro data later this week (U.S. CPI, PPI, retail sales) may confirm whether the current USD weakness trend sustains.