US Dollar:
1. According to the New York Times: US President Trump and Senate Minority Leader Schumer are moving towards a possible agreement to avoid a government shutdown.
2. ECB Governing Council member Villeroy: The decline in the dollar is a sign of the unpredictability of the US economy. The inflationary impact of a weaker dollar may influence interest rate decisions.
3. US Treasury Secretary Bessant stated that the US has always pursued a strong dollar policy. Trump's recent "weak dollar" remarks caused the dollar index to fall to a four-year low.
4. US Treasury Secretary Bessant: The Fed's independence does not mean a lack of accountability. Trump's nominee for Fed Chair may be decided in about a week.
5. Fed January FOMC meeting: The Fed paused, maintaining interest rates in the 3.5-3.75% range. Milan and Waller supported a 25 basis point rate cut. Powell reiterated that interest rates are at the upper end of the neutral range, and that policy has no predetermined path, relying on data. Powell also stated that if tariff inflation peaks and then declines, it indicates that policy can be eased, and advised his successor to stay away from politics.
Euro:
1. The euro broke through the psychological level of 1.20 against the dollar, unsettling European Central Bank (ECB) policymakers.
2. ECB Governing Council member Simkus: The euro-dollar exchange rate level does not indicate any policy direction.
3. ECB Executive Board member Schnabel: ECB interest rates are at a good level and are expected to remain at current levels for an extended period.
4. ECB Governing Council member Villeroy: The euro has no exchange rate target. We are closely monitoring the euro's appreciation against the dollar and its potential impact on lower inflation.
5. Eurozone money markets on Wednesday priced in a roughly 25% probability of an ECB rate cut by July, compared to 15% on Tuesday.
6. The German government lowered its economic forecasts, reducing its 2026 GDP growth forecast from 1.3% to 1.0% and its 2027 growth forecast from 1.4% to 1.3%.
Yen:
1. Preliminary polls indicate that Japanese Prime Minister Sanae Takaichi is likely to expand her parliamentary majority.
2. According to Japan's Jiji Press: A system malfunction disrupted foreign exchange transactions at 140 credit unions across Japan.
3. US Treasury Secretary Bessenter stated that there would be "absolutely no" intervention in the yen market, causing the yen to fall sharply against the dollar, halting its three-day rally.
South Korean Won:
1. The Bank of Korea and the South Korean Finance Minister stated they will closely monitor the financial markets.
2. South Korean Deputy Finance Minister: Foreign exchange fluctuations may affect capital flows under the South Korea-US currency agreement.
3. South Korean Ministry of Trade, Industry and Energy: The South Korean Minister of Trade, Industry and Energy will visit the US to meet with the US Secretary of Commerce and Secretary of Energy.
4. South Korean Presidential Advisor: Consultations are expected to begin in February with the US on project selection for the $350 billion investment plan. The possibility of the US raising tariffs again due to future disagreements on investment issues cannot be ruled out.
Other:
1. Monetary Authority of Singapore: The policy range and its central level remain unchanged.
2. Hong Kong Monetary Authority: The Hong Kong Exchange Fund's investment income reached HK$331 billion last year, a record high.
3. Brazil's central bank kept its benchmark interest rate unchanged at 15%, indicating it will begin cutting rates at its next meeting.
4. The Bank of Canada kept its benchmark interest rate unchanged at 2.25% for the second consecutive meeting, in line with market expectations.
5. Indonesia's Finance Minister stated that despite market shocks, Indonesia's economic fundamentals remain solid.
6. Traders said the Reserve Bank of India is likely to sell US dollars to support the Indian rupee before the local spot market opens.
7. The Hong Kong Monetary Authority kept its benchmark interest rate unchanged at 4.0%, stating that uncertainty surrounding future US interest rate trends will also impact Hong Kong's interest rate environment.
8. The Central Bank of Ghana lowered its key interest rate by 250 basis points to 15.50%. The Governor of the Central Bank of Ghana stated that the central bank has sold some of its gold reserves to obtain foreign exchange.
