Core Viewpoint - The US dollar experienced its largest annual decline in eight years in 2025, with a 9% drop, and remains down about 1% from the start of the year despite a recent rally [1][2]. Group 1: Dollar's Performance and Market Sentiment - The dollar index has not recovered from the significant losses incurred after President Trump's tariff announcements, which caused a more than 5% drop in the dollar [2]. - Investors are skeptical about the US administration's commitment to a "strong dollar," as policy uncertainty continues to affect market confidence [1][2]. Group 2: Reserve Currency Status - The US dollar has long been regarded as the world's reserve currency, providing the US with an "exorbitant privilege" and serving as a safe haven during market instability [3]. - There are concerns that the dollar's reserve status may be threatened due to the US's changing role in global security and order, leading to potential reallocations away from the dollar [4]. Group 3: Monetary Policy Implications - The nomination of Kevin Warsh as Fed Chair has raised expectations of aggressive rate cuts, which briefly supported the dollar but ultimately contributed to ongoing uncertainty [5][6]. - President Trump's comments indicate a strong likelihood of rate cuts under Warsh's leadership, further complicating the dollar's outlook [6]. Group 4: Alternative Hedging Strategies - As geopolitical risks and policy uncertainties rise, traders are increasingly seeking alternative hedges, such as the euro, Swiss franc, and gold, indicating a shift in market sentiment away from the dollar [7].

Cotton futures saw mixed trade on Wednesday, with contracts 10 points lower to 14 points higher in the nearbys. Crude oil futures were up $1.10 per barrel on the day at $63.49. The US dollar index was back up $0.144 after yesterday’s collapse to $96.195. The Tuesday online auction from The Seam showed sales of 56.06 cents/lb on 10,023 bales. The Cotlook A Index was down 75 points on January 27 at 73.30 cents. ICE certified cotton stocks were up 2 bales on 1/27 with the certified stocks level at 8,597 bale ...

Core Viewpoint - The US dollar is experiencing a significant decline, reaching a four-year low, raising concerns among investors about the Trump administration's policies and their impact on the dollar's status as the world's reserve currency [1][6]. Group 1: Dollar Decline - The US dollar has fallen by 3.19% against a basket of currencies since January 19, with a nearly 1% drop occurring in a single day [1][10]. - The rapid decline in the dollar's value is alarming to economists, with predictions of further drops of 2% to 3% before stabilizing [8][10]. Group 2: Investor Sentiment - There are growing concerns that international investors are losing faith in US policymaking under the Trump administration, which could threaten demand for US government debt [5][6]. - The administration's apparent desire to weaken the dollar as a strategy to reduce the trade deficit is contributing to investor unease [2][10]. Group 3: Economic Implications - A weaker dollar could make US exports cheaper and imports more expensive, potentially aiding in the revival of American manufacturing [10]. - However, the strength of the dollar is also tied to foreign interest in US government bonds, which are viewed as a safe investment [11].

Group 1 - Cotton futures are experiencing gains of 7 to 8 points for the front month contracts as of Wednesday's midday [1] - Crude oil futures have increased by 15 cents per barrel, reaching $60.50 [1] - The US dollar index has risen by $0.051 to a level of $98.490 [1] Group 2 - The online auction from The Seam reported sales at 61.10 cents per pound for 25,238 bales [2] - The Cotlook A Index remained unchanged at 74.80 cents on January 20 [2] - ICE certified cotton stocks decreased by 607 bales to a total of 10,422 bales as of January 20 [2] - The Adjusted World Price was updated to 51.17 cents per pound, reflecting an increase of 20 points from the previous week [2] Group 3 - March 26 Cotton is priced at 64.42 cents, up 8 points [3] - May 26 Cotton is priced at 66.03 cents, up 7 points [3] - July 26 Cotton is priced at 67.5 cents, up 7 points [3]

Core Viewpoint - The Swiss franc is solidifying its status as a preferred safe haven currency amid rising global risk aversion due to US President Donald Trump's recent tariff proposals [1][4]. Group 1: Currency Performance - The Swiss franc led gains among Group-of-10 currencies, advancing 0.7% against the US dollar and reaching a two-month high against the euro [2]. - The franc is trading close to a record high against the Japanese yen, highlighting its strength as a safe haven [2]. Group 2: Investor Sentiment - Investors are increasingly favoring the Swiss franc due to its modest debt burden, political neutrality, and predictable policy-making, contrasting with the US and Japan [3][6]. - The franc has historically matched or outperformed gold in purchasing power, making it a favored choice among traditional safe havens [5]. Group 3: Economic Stability - The Swiss economy benefits from political stability, a balanced budget, and a persistent current account surplus, which contribute to the franc's outperformance against its peers [6]. - On risk-off days, the franc tends to rally against the dollar, consistently outperforming the yen and providing a stronger buffer against market volatility [7].

Core Viewpoint - The announcement of a 10% tariff on European countries by President Trump has led to a decline in the dollar, raising concerns about holding American assets due to unpredictable US policies [1]. Currency Impact - European currencies, particularly the Swiss franc, have gained strength as investors seek safe-haven assets, with the euro recovering from a two-month low [2]. - The Swiss franc is expected to benefit significantly in a context of a weaker dollar [3]. Market Dynamics - Elevated USD exposure in Europe may prompt a rebalancing of dollar assets, especially if the EU activates its anti-coercion measures, which could disrupt capital markets more than trade flows [4]. - Trump's tariff threats have reignited the trend of "selling America," with potential implications for the USD as a negotiating tactic [5]. Geopolitical Risks - The eurozone may face cyclical challenges due to increasing geopolitical risks under Trump's presidency, potentially exacerbating pressures related to the ongoing conflict in Ukraine [6]. - US assets are now perceived to carry a higher political risk premium, which may lead foreign investors to reduce their exposure to US assets [7].

Group 1: Market Dynamics - Gold is gaining support due to a weaker US dollar and expectations of potential interest rate cuts by the Federal Reserve [2][3] - Silver is trading at 91.09, reflecting a 4.72% increase, driven by the same factors affecting gold [1] - The US dollar is showing weakness, trading around 99.10, which makes gold and silver cheaper for international buyers [2] Group 2: Economic Indicators - The US Consumer Price Index (CPI) indicates cooling inflation, with core CPI rising only 0.2% in December, keeping annual core inflation at 2.6%, the lowest in four years [4] - The headline CPI increased by 0.3% monthly, resulting in an annual inflation rate of 2.7%, aligning with market forecasts [4] Group 3: Geopolitical Factors - Rising geopolitical tensions, particularly related to the situation in Iran and threats from the Trump administration, are contributing to market uncertainty [5][6] - The crackdown on protests in Iran and the government's internet blackout are exacerbating the situation, leading to increased market sentiment tension [6]

Market Overview - Cotton futures experienced gains of 50 to 55 points across the front months, influenced by favorable USDA data [1] - Crude oil futures increased by 72 cents per barrel, reaching $59.84 [1] - The US dollar index decreased by $0.215, settling at $98.675 [1] Cotton Production and Stocks - USDA reported an increase of 430,000 acres in cotton harvested, but yield decreased by 73 lbs/acre to 856 lbs [2] - Total cotton production fell by 0.35 million bales to 13.92 million bales [2] - Ending stocks were reduced by 300,000 bales, now totaling 4.2 million bales [2] Auction and Pricing Information - The Friday online auction from The Seam recorded sales at 56.57 cents/lb for 4,773 bales [3] - The Cotlook A Index decreased by 35 points to 74.45 cents on January 9 [3] - ICE certified cotton stocks remained steady at 11,510 bales as of January 9 [3] - The Adjusted World Price rose by 21 points to 50.97 cents/lb [3] Cotton Futures Closing Prices - March 26 Cotton closed at 64.91, up 50 points [3] - May 26 Cotton closed at 66.44, up 53 points [3] - July 26 Cotton closed at 67.86, up 55 points [3]

Core Viewpoint - The dollar has experienced its largest decline in nearly three weeks due to concerns over political interference in monetary policy following grand jury subpoenas served to the Federal Reserve [1][2]. Group 1: Federal Reserve and Political Influence - Fed Chair Jerome Powell disclosed that the central bank received grand jury subpoenas, which could lead to criminal charges related to his testimony on headquarters renovations [1]. - The subpoenas are linked to the Fed's decision-making process on interest rates, which Powell stated was based on its own assessments rather than the preferences of President Donald Trump [2]. Group 2: Market Reactions and Sentiment - The Bloomberg Dollar Spot Index fell by 0.3%, marking its most significant drop since December 23, indicating a shift in market sentiment towards the dollar [1]. - Macro traders are expected to increase short positions on the US dollar due to the risk that Powell may be hindered in his role as Fed chair [3]. Group 3: Future Implications for the Dollar - Concerns over the Fed's autonomy could disrupt the previously bullish sentiment towards the dollar, particularly against the euro [4]. - Despite the current threats to the Fed's independence, analysts suggest that there are still positive factors supporting the dollar's strength in the long term [5].

Core Insights - The US dollar is losing its traditional safe-haven status as geopolitical tensions rise, leading to a significant increase in gold and silver prices [1][4] - Gold is approaching $5,000 and silver has surpassed $82, prompting investors to reevaluate previous macroeconomic assumptions [2][5] - The current market behavior indicates a shift towards hard assets, with gold and silver experiencing unusual simultaneous breakouts typically associated with systemic stress [5][6] Group 1: Market Dynamics - Historical trends show that during US military escalations, the dollar typically strengthens; however, this time it has weakened while gold and silver have surged [3][4] - The US dollar index has dropped to 98.53, reflecting skepticism about its role as a geopolitical hedge [4][5] - Gold has reached $4,560 for the first time, while silver has jumped above $84, marking one of its strongest performances in decades [5] Group 2: Supply and Demand Factors - Analysts suggest that silver's price increase is not merely speculative but indicates real-economy demand, as large corporate buyers are entering the market [6] - The entry of silver into contango suggests companies are hedging against future supply shortages and rising costs [6] Group 3: Price Suppression Debate - The recent rally has reignited discussions about potential price suppression in precious metals markets, with references to past manipulation cases as significant turning points [7]