RismadarVoice Reporters
January 6, 2026
The United States dollar weakened for a second consecutive day on Tuesday as fears triggered by recent U.S. military action in Venezuela subsided and global markets shifted back to a risk on mood.
Currency markets showed reduced demand for safe haven assets as stocks rallied worldwide, supported by easing geopolitical tensions and dovish signals from officials of the U.S. Federal Reserve.
The euro edged higher against the dollar, while the British pound also gained modestly. The dollar was slightly weaker against the Japanese yen but marginally stronger against the Swiss franc. The dollar index, which tracks the currency against a basket of major peers, slipped further after ending a four day winning streak on Monday.
Market analysts noted that the initial flight to safety, following the U.S. capture of Venezuelan President, Nicolas Maduro was short lived, with equities recovering quickly and trading near record highs. This rebound in stocks contributed to the reversal of earlier dollar gains.
Currencies tied closely to global risk sentiment outperformed, with the Australian dollar rising to its highest level in over one year and the New Zealand dollar also strengthening.
The dollar was further pressured by weak U.S. economic data released on Monday, showing manufacturing activity contracted more sharply than expected, fell to a fourteen month low. Comments from Minneapolis Federal Reserve President Neel Kashkari added to the downward pressure after he warned of risks to the U.S. labour market, increasing expectations of future interest rate cuts.
Despite the softer tone, future markets continue to price a high probability that the Federal Reserve will keep interest rates unchanged at its next policy meeting later this month.
Against the Chinese yuan traded offshore, the dollar was slightly lower, reflecting broader weakness across major currency pairs as investors turned their attention from geopolitical shocks to economic fundamentals and central bank policy outlooks.
