FX.co ★ Dollar Falls 2% in January

The dollar index trimmed its initial upward movement on Friday, settling around 96.4, close to its early 2022 lows. This came on the heels of President Trump's decision to nominate Kevin Warsh as the successor to Jerome Powell for the Fed chair position, aligning with earlier indications. Warsh is perceived by the market as a relatively hawkish choice, likely to endorse lower interest rates, albeit with less intensity compared to some other potential candidates. Investors remain anticipatory of a Federal Reserve rate decrease in June, followed by another later in the year, possibly in October. Over the month of January, the dollar experienced a 2% drop, marking its poorest monthly performance since June. This decline was influenced by the "sell America" sentiment driven by geopolitical tensions, changes in Washington's tariff policies, and a weakening yen. Concurrently, the White House and Senate Democrats have tentatively agreed on a deal to prevent a US government shutdown, though this agreement still awaits Senate approval.