Global foreign exchange markets have experienced heightened volatility in recent weeks, with notable movements in the U.S. dollar, Japanese yen and Chinese renminbi.

The U.S. dollar index fell to a four‑month low amid speculation that the U.S. and Japan might jointly intervene in the currency markets and investors grew anxious about a potential U.S. government shutdown and rising geopolitical risks. The yen surged 1.6% against the dollar in one session—its largest rise since August—after U.S. authorities conducted rare “rate checks” with trading firms to assess market conditions.

Safe‑haven demand also sent gold prices to record highs, briefly surpassing US$5,000 per ounce. This suggests that investors are seeking protection from currency volatility through alternative assets.

On the policy front, the U.S. Treasury’s latest semiannual report on foreign exchange policies described the renminbi as “substantially undervalued” and urged Chinese authorities to allow the currency to appreciate in line with economic fundamentals. The report pointed to China’s large trade surplus and current account balance as key reasons for upward pressure on the RMB, signaling that Washington wants greater flexibility in China’s exchange‑rate regime.

Meanwhile, the Reserve Bank of India reported that India’s foreign exchange reserves rose by US$8 billion to US$709.41 billion in the week ending January 23, 2026. The increase underscores the resilience of India’s external sector and provides additional support for the Indian rupee amid global market turbulence.

In summary, recent forex market themes include:

• A weakening U.S. dollar and strengthening Japanese yen;

• Rising demand for safe‑haven assets like gold;

• Policy signals around the RMB’s valuation;

• Growing FX reserves in emerging economies.

In an environment of policy uncertainty and currency swings, individuals and businesses with cross‑border exposure should monitor macroeconomic developments and plan currency transactions carefully.