NEW YORK, Jan 4, 2026, 09:34 ET — Market closed
- The dollar index ended Friday up 0.24% at 98.48.
- U.S. forces captured Venezuela’s leader Nicolas Maduro in a weekend raid; he is due in a Manhattan court on Monday.
- Traders are watching the Jan. 9 U.S. jobs report and the Fed’s Jan. 27-28 meeting for the next major dollar catalysts.
The U.S. dollar heads into Monday’s reopening with a fresh geopolitical jolt after U.S. forces struck Venezuela and captured President Nicolas Maduro over the weekend.
The key question for traders is whether the first market response is classic “risk-off” positioning — investors cutting exposure to riskier assets — that typically boosts demand for the dollar and other havens.
It also lands as investors brace for a heavy run of U.S. economic releases that can reset expectations for Federal Reserve interest rates, a main driver of currency pricing.
On Friday, the dollar index — which measures the greenback against a basket of major currencies — rose 0.24% to 98.48, with the euro down 0.25% at $1.1716. Sterling eased 0.18% to $1.3445, while the dollar bought 156.91 yen, keeping the Japanese currency near a 10-month low that has kept intervention risk on traders’ radar.
Maduro was in a New York detention center on Sunday and is due to appear in a Manhattan court on Monday, Reuters reported. The U.N. Security Council planned to meet Monday to discuss the U.S. move, adding another headline risk point as markets reopen.
The dollar’s firmer close came alongside a positive start to 2026 for U.S. stocks. The Dow rose 0.66% on Friday, the S&P 500 gained 0.19% and the Nasdaq edged down 0.03%, a mix that left investors sensitive to any abrupt shift in sentiment when trading resumes.
Some strategists warned the Venezuela operation could trigger a short-term flight to safety when markets reopen, even as longer-term investors debate whether a change in Venezuela’s trajectory could eventually boost oil supply. Stephen Dover, chief market strategist at Franklin Templeton, said in a LinkedIn post the episode was likely to “add to the uncertainty of the dollar’s role as a safe haven.” Reuters
Monetary policy remains the other big pillar for dollar trading. Philadelphia Fed President Anna Paulson said on Saturday that further rate cuts could be “some way off” as officials assess the economy after the Fed cut rates by 75 basis points in 2025, leaving the policy rate at 3.5% to 3.75%. Reuters
But the dollar’s path is not one-way. If investors lean into the view that Venezuela’s oil sector could be rebuilt over time and crude prices stay contained, risk appetite can return quickly and blunt demand for the greenback as a crisis hedge.
From a chart-watcher’s perspective, traders will be watching whether the dollar index can sustain traction toward the psychologically important 100 level, after ending Friday below it.
The next clear, scheduled test comes on Friday, when the U.S. Labor Department publishes the Employment Situation report for December 2025 at 8:30 a.m. ET. A surprise in hiring or wages can quickly shift rate-cut pricing and, with it, the dollar.
Beyond that, markets will look to the Fed’s first policy meeting of the year on Jan. 27-28 for guidance on how quickly officials are prepared to ease, and whether the balance of risks has shifted after the Venezuela shock.
