KUALA LUMPUR, Jan 28 (Bernama) -- Bursa Malaysia snapped its five-day winning streak to close lower on Wednesday, as investors took profit following a cumulative gain of 4.25 per cent over the past five sessions, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 14.76 points or 0.83 per cent to 1,756.49 from Tuesday’s close of 1,771.25. The market bellwether opened 1.46 points lower at 1,769.79, marking the day’s high, and hit a low of 1,750.05 during the mid-afternoon session. Market breadth was negative with losers trouncing gainers 876 to 384, while 525 counters were unchanged, 964 untraded and 94 suspended. Turnover improved to 3.65 billion units worth RM4.41 billion from Tuesday's 3.58 billion units worth RM4.46 billion.
What’s happening
The US dollar is coming under renewed pressure in early 2026 as investors reassess political, monetary and geopolitical risks tied to the US. The greenback is on track for its sharpest three-day drop since April 2025, when tariff threats triggered a broad selloff in US assets.
Under Donald Trump, policy unpredictability has resurfaced — from tariff threats and geopolitical brinkmanship to attacks on Federal Reserve independence — prompting investors to rethink long-held assumptions about dollar stability.
Why the dollar is under fire
Several forces are converging:
Political risk premium is rising: erratic trade threats, diplomatic tensions, and renewed talk of a US government shutdown
Monetary policy divergence: markets expect the Fed to cut rates at least twice this year, while other central banks pause or even tighten
Fed leadership uncertainty: Chair Jerome Powell is set to step down in May, with speculation that a more dovish successor could weaken policy credibility
Safe-haven rotation: gold has surged to record highs, while volatility remains elevated in bonds and FX
As one strategist put it, this is not yet a full “Sell America” trade, but fundamentals are turning against the dollar faster than expected.
Markets are quietly diversifying
Global investors are increasingly rebalancing away from US assets after years of heavy concentration. Since Trump’s return:
The S&P 500 is up ~15%
South Korea’s Kospi has surged ~95%
Japan’s Nikkei is up ~40%
China’s main index has gained ~30%
This relative underperformance is encouraging asset managers to diversify currency and equity exposure, weighing further on the dollar.
Key risk signals to watch
Gold at record highs → demand for non-dollar safe havens
Fragile bond sentiment, amplified by Japanese government bond volatility and potential spillover into Treasuries
Yen dynamics, including suspected coordination between the Bank of Japan and the New York Fed
Geopolitics over economics: tariffs and diplomacy are increasingly driving FX, not growth alone
Bottom line
The US dollar is losing its policy premium. While the move is not yet disorderly, political uncertainty, Fed credibility concerns and global diversification trends are steadily eroding confidence. Unless policy volatility eases, the dollar is likely to remain structurally pressured rather than cyclically weak in 2026.
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