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27.01.202611:27 Forex Analysis & Reviews: Trump to soon appoint new central bank chief, raising concerns about Fed independence

Exchange Rates 27.01.2026 analysis

The US dollar index (DXY), which measures the dollar against a basket of six major currencies, is showing weakness, trading around the round level of 97.00.

Concerns about the Federal Reserve's independence have pushed the index down to a low last seen on September 18, 2025. Last week, US President Donald Trump announced he would soon name his candidate to lead the Fed after Jerome Powell's term expires in May. Reuters reports that the bookmakers' favorite is Rick Ryder, head of BlackRock.

As Tim Duy, chief US economist at SGH Macro Advisors, noted, the policy stance of the Fed's next chair cannot be analyzed separately from the macroeconomic backdrop or from his influence on other FOMC members.

In addition, a likely partial suspension of federal government operations is further undermining the dollar. The US administration again risks a partial shutdown because Senate Democratic leader Chuck Schumer intends to oppose a funding package that includes money for the Department of Homeland Security. Congress must act by January 30 to fund the government; otherwise a partial shutdown will occur.

At Wednesday's meeting the Fed is likely to leave rates unchanged after three cuts late in 2025. For trading opportunities, pay close attention to the Fed chair's press conference, where clues about the US economic outlook and the interest?rate path may appear. Any hawkish comments from Fed officials could limit further near?term losses for the dollar.

Later today, ADP employment change and US consumer?confidence data are expected.

Technically, the dollar index has shown resilience just below the round level of 97.00. However, daily?chart oscillators are negative and the relative?strength index is close to the oversold zone, suggesting the potential for a corrective bounce. If DXY fails to hold the 97.00 level, a faster decline toward the September low near 96.20 is likely. If prices hold, the index could aim for 97.40.

Exchange Rates 27.01.2026 analysis

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Irina Yanina,
Analytical expert of InstaSpot
© 2007-2026
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