Published: January 29, 2026 | Updated: January 29, 2026 | Tapbit Forex & Macro Desk
The US Dollar Index (DXY) plunged to a fresh four-year low of 95.86 in early Asian trading on January 27–28, 2026, before stabilizing above 96 after President Trump publicly stated that a weaker dollar would be “great” for US exports and competitiveness, while Treasury Secretary Scott Bessent quickly reaffirmed the administration’s commitment to a “strong dollar policy.” The rapid reversal underscores ongoing tension between the White House’s trade-focused rhetoric and the traditional Treasury/ Fed stance on dollar strength. This article provides a complete breakdown of the drivers behind the four-year low, the Trump–Bessent policy clash, technical levels to watch, market reaction across forex, equities, commodities and crypto, and actionable trading strategies on Tapbit for navigating the renewed dollar volatility in early 2026.
DXY Four-Year Low – Key Price Action Timeline (Jan 27–29, 2026)
| Date / Session | DXY Level | Change | Key Event / Trigger |
|---|---|---|---|
| Jan 27 (Asia) | 96.18 → 95.86 (low) | -0.33% | Trump Truth Social post: weaker dollar “great” for US |
| Jan 28 (US open) | 95.86 → 96.39 (high) | +0.55% | Bessent statement: “The US has a strong dollar policy” |
| Jan 29 (current) | ~96.18 | -0.22% intraday | Stabilization ahead of Fed speakers & data |
The 95.86 print marked the lowest level since late 2021 and represented a ~9% decline from the early-2025 peak near 105.50, driven by cumulative Fed easing expectations and Trump administration comments favoring export competitiveness over dollar strength.
Trump vs Bessent – The Dollar Policy Clash Explained
President Trump’s January 27 Truth Social post stating that a weaker dollar would be “great” for US manufacturing and exports reignited fears of currency manipulation or deliberate devaluation pressure. The comment sent the dollar sharply lower, especially against major crosses (EUR/USD +0.7%, USD/JPY -0.9%).
Treasury Secretary Scott Bessent responded swiftly on January 28, reaffirming: “The United States has a strong dollar policy. We believe a strong dollar is in the best interest of the American economy, American workers, and American consumers.”
The contrast highlights an internal administration tension that has recurred throughout Trump’s second term: trade-focused officials favoring a competitive currency vs. Treasury/Fed preference for dollar stability to attract foreign capital and control inflation.
Market Reaction – Forex, Equities, Commodities & Crypto
The brief dollar sell-off and subsequent stabilization produced varied cross-asset responses:
- Forex: EUR/USD spiked to 1.1180 before retreating to 1.1120; USD/JPY fell below 148 before recovering above 149.
- Equities: Risk-on relief rally — Nasdaq +0.6%, S&P 500 +0.4%; export-sensitive stocks outperformed.
- Commodities: Gold (XAU/USD) extended gains toward $2,680; oil rose on weaker dollar export boost.
- Crypto: Bitcoin briefly touched $90,600 before consolidating near $89,300; Ethereum held near $3,000.
Overall, the episode reinforced the market’s sensitivity to White House dollar rhetoric while Bessent’s intervention limited downside.
Technical Levels & Sentiment Indicators (DXY)
Current ~96.18 (Jan 29)
- Immediate Support: 95.80–96.00 (prior low + 200-day EMA proxy)
- Critical Support: 95.00–95.20 (psychological + Fib 0.618 retracement)
- Next Resistance: 96.80–97.00 (round number + prior consolidation zone)
- Bear Target: 94.50 (extension if Trump rhetoric escalates)
- RSI (Daily): ~38 → oversold, room for bounce
- Volume: Spike on downside move → capitulation selling exhausted
Trading Strategies & Positioning on Tapbit
- Create your Tapbit account (0% maker fees)
- Deposit USDT via bank transfer / P2P
- Dollar rebound play: Long USD or short EUR/USD on stabilization above 96.00 (20–50x leverage, isolated margin)
- Risk-on proxy: Long BTC/USDT or ETH/USDT perpetuals if dollar weakness persists
- Safe-haven hedge: Long XAU/USDT perpetuals on renewed Trump devaluation comments
- Risk control: Max 1–2% account risk per trade; trailing stops below recent lows
Conclusion & Near-Term Outlook
The US Dollar Index’s brief plunge to a four-year low of 95.86 on January 27–28, 2026 — triggered by President Trump’s comment that a weaker dollar would be “great” for US exports — was quickly stabilized above 96 after Treasury Secretary Scott Bessent’s firm reaffirmation of a “strong dollar policy.” The episode highlights ongoing tension between trade-focused White House rhetoric and traditional Treasury/Fed preference for dollar stability. While the dollar’s rebound limited downside in risk assets, the volatility underscores its sensitivity to administration comments.
Trade dollar volatility & risk-on flows on Tapbit:
Disclaimer: Forex and cryptocurrency trading involve significant risk of loss. Exchange rates and digital asset prices are highly volatile and can change rapidly. Political statements and policy comments can cause sharp movements. This article is for informational purposes only and does not constitute investment, financial or trading advice. Always conduct your own research (DYOR) and never trade with money you cannot afford to lose completely.
