Dollar Slips to 96.17 as Policy Uncertainty Weighs Despite Fed’s Hawkish Tone

The U.S. dollar fell 0.29% to 96.17 on January 29, 2026, pressured by lingering doubts over U.S. fiscal and trade policy despite the Federal Reserve’s mildly hawkish stance. Market sentiment remains fragile amid uncertainty around potential rate cuts, geopolitical tensions, and mixed signals from the White House. Analysts cite President Trump’s tacit endorsement of a weaker dollar and conflicting messaging from Treasury Secretary Scott Bessent as key drivers of volatility. Weekly jobless claims declined slightly, but weak hiring trends are fueling labor market anxiety. Some economists, including Macquarie’s David Doyle, argue the Fed’s easing cycle may be over, with a possible hike by Q4 2026. Meanwhile, the euro rose 0.5% to $1.196, drawing ECB concern over deflationary risks from currency strength. ECB officials maintain rates will stay steady through early 2027.