Key points:
- Euro pops toward $1.17
- Dollar sells off across the board
- Powell under fire as DOJ makes a move
Trump said he doesn’t know anything about it. Powell said it’s a retaliation for his firm stance on interest rates.
⚖️ Powell vs DOJ Spooks the Dollar
- The EURUSD pair ripped toward $1.17 as traders dumped the greenback after the Department of Justice launched a criminal probe into Fed Chair Jay Powell, turning a policy dispute into a full-blown political drama.
- The world’s most powerful central bank looks under legal pressure, so what are the FX desks to do? No time for debating. Instead, they sell dollars first and ask questions later.
🎥 Powell Says “This Is About Rates”
- Powell went straight to camera Sunday night, confirming grand-jury subpoenas over the Fed’s $2.5 billion renovation — but saying the probe is really about pressuring him to slash interest rates.
- In plain English: he believes the DOJ case is a political lever aimed at controlling monetary policy, not concrete, steel, or overpriced Washington drywall.
- His term ends in May, making the timing extra spicy for markets already nervously watching the Fed’s next move. Speaking to journalists, Donald Trump said he “doesn’t know anything about it.”
🛡️ Safe Havens Steal the Spotlight
- Gold (XAUUSD) blasted to a record above $4,600 this morning as investors ran for protection — a classic move when faith in central-bank independence starts wobbling.
- But why did the dollar dip? Traders fear the Fed could be boxed into political decisions, which usually means looser policy and a weaker currency.
- With the Fed expected to pause cuts this month when officials meet on January 27-28, this legal drama just added a wild new variable to every FX trade on the board.
