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News
Monday, February 02, 2026
What’s happening: The US dollar recorded gains on Friday after Kevin Warsh was named as the next Federal Reserve Chairman.
What happened: US President Donald Trump nominated former Federal Reserve Governor Kevin Warsh to succeed Jerome Powell.
Meanwhile, the White House and Democrats reached a spending deal to prevent another US government shutdown.
Why it matters: President Donald Trump selected Kevin Warsh to head the Federal Reserve with Jerome Powell’s term scheduled to end in May. Warsh is expected to support interest rate cuts, although his approach could be less aggressive than other potential nominees. Nonetheless, the change in the Fed chief triggered concerns around the independence of the Federal Reserve.
Last week, the Fed kept its benchmark interest rates unchanged, under Jerome Powell’s watch, with him describing the US economy as “solid”. Markets now widely expect at least one interest rate cut in June and another later in the year.
Data released on Friday provided a further boost to the US dollar. US producer prices rose more than expected in December, as businesses looked to pass on rising costs from import tariffs. US producer prices surged 0.5% in December, the biggest rise in three months, following a 0.2% gain in November. The December figure came in higher than market expectations of 0.2%.
The US dollar index, which measures the greenback’s performance versus a basket of major peers, jumped 0.9% on Friday. The index extended gains this morning, rising by around 0.1%.
The greenback declined around 2% in January, recording its weakest monthly performance since June 2025, amid geopolitical concerns and tariff-related news.
The USD/JPY rose on Friday, after falling for most of last week.
What to watch: Investors will continue monitoring geopolitical concerns with mounting tensions between the US and Iran. Trump has indicated that he is ready for negotiations with Iran.
Data on S&P Global Manufacturing PMI (1845 UAE Time) and ISM Manufacturing PMI (1900 UAE Time) will be released today. Analysts expect the S&P Global manufacturing PMI to rise to 51.9 in January from 51.8 in December. The ISM manufacturing PMI, which declined for a third straight to 47.9 in December, is expected to rise to 48.3 in January.
Context: Equity markets in the Eurozone closed sharply higher in the final trading session of January.
Details: Recent data showed that the Eurozone’s GDP grew by 1.3% year-over-year in the last quarter of the year, exceeding market estimates of 1.2%. This signalling traction in the economy despite concerns around trade war threats in recent quarters. Data from Spain, Germany and Italy also topped market estimates.
The Eurozone’s GDP expanded by 1.5% in 2025. The European Central Bank and the European Commission projected economic growth of 1.2% for the current year and 1.4% for 2027.
The Eurozone’s unemployment rate eased for the second month in a row to 6.2% in December from 6.3% in the previous month. In December, Eurozone’s median inflation expectations came in unchanged at 2.8% for the next 12 months.
Banks and tech stocks recovered following losses in recent sessions. Shares of ASML, Deutsche Bank and SAP closed higher on Friday. Meanwhile, shares of Adidas gained 4% after the company reported that its revenues grew 13% to a record high in 2025.
Mining stocks moved lower, with shares of Anglo American and Rio Tinto recording losses in the session.
The STOXX Europe 600 Index gained 0.64% to close at 611.00 on Friday, while London’s FTSE 100 rose 0.37% to settle at 10,209.12. Germany’s DAX 40 and France’s CAC 40 added 1.02% and 0.81%, respectively.
What to watch: Investors await the release of economic data on Eurozone’s HCOB manufacturing PMI (1300 UAE Time) today. Analysts expect the HCOB Eurozone manufacturing PMI to rise to 49.4 in January from 48.8 in the previous month.
Other Markets: US trading indices closed lower on Friday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.36%, 0.43% and 1.28%, respectively.
US special envoy Steve Witkoff said that he had constructive meetings with Russia’s special envoy Kirill Dmitriev. The news sent the USD/RUB pair higher in forex trading this morning.
China’s RatingDog general manufacturing PMI rose to 50.3 in January from 50.1 in December, exerting pressure on the USD/CNY forex pair.
Vietnam’s S&P Global manufacturing PMI declined to 52.5 in January from 53 in the previous month. Manufacturing activity remaining in the expansion zone sent the USD/VND pair lower in forex trading this morning.
Taiwan’s S&P Global manufacturing PMI surged to 51.7 in January from 50.9 in the previous month. Manufacturing activity surging to the highest level since December 2024 exerted pressure on the USD/VND forex pair.
Australia’s ANZ-Indeed job ads climbed 4.4% in December, recovering from a 0.8% decline in the previous month, which sent the AUD/USD pair slightly higher in forex trading this morning.
Spain’s HCOB manufacturing PMI (1215 UAE Time) and new car sales (1600 UAE Time), Italy’s HCOB manufacturing PMI (1245 UAE Time), France’s HCOB manufacturing PMI (1250 UAE Time), Germany’s HCOB manufacturing PMI (1255 UAE Time), South Africa’s ABSA manufacturing PMI (1300 UAE Time), UK’s S&P Global manufacturing PMI (1330 UAE Time), Brazil’s S&P Global manufacturing PMI (1700 UAE Time), Singapore’s SIPMM manufacturing PMI (1700 UAE Time) as well as Canada’s S&P Global manufacturing PMI (1830 UAE Time).
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