FX Weekly Recap: January 19 – 23, 2026

Currency markets whipsawed through a week dominated by President Trump’s dramatic Greenland gambit, which sparked a “Sell America” wave before his midweek about-face triggered sharp reversals across the board. The action kicked off with Trump’s weekend threats to slap 10% tariffs on eight NATO allies opposing his Greenland bid, sending the dollar tumbling and safe havens soaring as traders questioned Washington’s commitment to its allies.

The pivot came during Trump’s Davos appearance, where he ruled out military force and announced a framework deal, effectively canceling the threatened levies. That de-escalation sparked powerful risk rallies that flipped the week’s script, with commodity currencies and risk assets surging while defensive plays retreated.

Against this volatile backdrop, domestic catalysts proved decisive for individual currency performance. Australia’s blockbuster employment report and surging PMIs propelled the Aussie to second place for the week, while New Zealand’s economic stabilization signals drove the kiwi to the top spot. The dollar emerged as the week’s worst performer, posting its steepest weekly decline since June as geopolitical whiplash outweighed otherwise solid US economic fundamentals.