Category: 3. Business

The US dollar made a feeble start to 2026 on Friday after struggling against most currencies last year, while the yen steadied near a 10 month low as traders awaited economic data to predict how central bankers direct interest rates this year.

A narrowing interest rate difference between the US and other economies cast a shadow over the market last year, resulting in most currencies gaining sharply against the dollar, with the Japanese yen an exception.

Worries about the US fiscal deficit, a global trade war and concern about Federal Reserve independence took a toll on the greenback, and those issues are likely to linger into 2026.

The euro EUR= was steady at $1.1752 on the first trading day of the year after surging 13.5% last year, while sterling GBP= last bought $1.3473 following a 7.7% increase in 2025. Both clocked their steepest annual increases since 2017.

Markets in Japan and China were closed on Friday, making for light trading volume and little movement.

Dwindling Dollar dominance 

The dollar index =USD, which measures the US currency against six other units, was at 98.186 after registering a 9.4% decline in 2025, its biggest drop in eight years.

“We have seen the peak in dollar supremacy,” said Kyle Rodda, senior market analyst at Capital.com. Even so, there has not been two consecutive years of decline in the dollar index for two decades, he said.

“I believe its demise has been overstated and that the relative strength of the US economy will mean we see it bounce back this year.”

Economic data including US payrolls and jobless figures are due next week, providing clues on the health of the labour market and where the Fed’s policy rate may end up this year.

Much of the focus at the start of the year will be on who US President Donald Trump picks to be the next Fed chair as the term of current head Jerome Powell ends in May.

Investors are bracing for Trump’s pick to be more dovish and cut rates after the president repeatedly criticised Powell and the Fed for not cutting rates more swiftly or deeply.

Traders are pricing in two cuts this year compared to one projected by a currently divided Fed board.

“We expect that concerns around central bank independence will extend into 2026, and see the upcoming change in Fed leadership as one of several reasons why risks around our Fed funds rate forecast skew dovish,” Goldman strategists said.

Yem remains the exception

The yen JPY= was at 156.85 per US dollar after rising less than 1% against the greenback in 2025. It hovered close to the 10 month low of 157.90 touched in November that drew policymaker attention and raised the prospect of intervention.

The Bank of Japan hiked interest rates twice in last year but that did little to improve yen performance as the cautious pace frustrated investors, with speculators reversing significant long yen positions held in April.

There has also been growing investor unease about fiscal expansion under Prime Minister Sanae Takaichi, though she has sought to ease some of that concern.

Traders are pricing the next BOJ rate hike as being toward the end of 2026. Min Joo Kang, senior economist at ING, expects the most likely timing to be October.

“A further fiscal push could backfire on the economy, but the current government is expected to maintain its expansionary policy stance, posing a significant risk to the economy in 2026,” Kang said in a client note.

The Australian and New Zealand dollars started the new year on the front foot. The Aussie AUD= was 0.35% higher at $0.66975 after a nearly 8% rise in 2025, its strongest yearly performance since 2020.

The kiwi NZD= snapped its three-year losing streak with a nearly 3% gain last year. On Friday, it firmed a touch to $0.5761.

Originally known as the Swimming Baths and Dispensary, the extensive health facility was built in 1891 for Great Western Railway (GWR) workers living nearby.

It offered a more holistic approach to care and featured baths and pools, a dispensary and consulting rooms for doctors and dentists.

Restoration plans began in 2018 when Swindon Borough Council commissioned an options appraisal for the future of the listed building.

In partnership with leaseholder GLL, Swindon Heritage Preservation and Historic England, the authority has secured about £8.6m worth of funding.

Beyond the main pool hall, future phases aim to revive the smaller pool area, Turkish baths and dispensary – but this remains dependent on further funding.

Sign up here.

The euro was down 0.2% at $1.1725 on the first trading day of the year after surging 13.5% last year, while sterling last bought $1.3455 following a 7.7% increase in 2025. Both clocked their steepest annual increases since 2017.

Markets in Japan and China were closed on Friday, making for light trading volume and little movement.

“Market liquidity should improve next week alongside a fuller data slate,” said Jens Nærvig Pedersen, FX strategist at Danske Bank.

NEXT WEEK’S DATA IN FOCUS

The dollar index , which measures the U.S. currency against six other units, was up 0.2% on Friday at 98.39 after registering a 9.4% decline in 2025, its biggest drop in eight years.

Economic data including U.S. payrolls and jobless figures are due next week, providing clues on the health of the labour market and where the Fed’s policy rate may end up this year.

Much of the focus at the start of the year will be on who U.S. President Donald Trump chooses to be the next Fed chair as the term of current head Jerome Powell ends in May.

Investors are bracing for Trump’s pick to be more dovish and cut rates, as the president has repeatedly criticised Powell and the Fed for not lowering borrowing costs more swiftly or deeply.

Traders are fully pricing in two cuts this year compared to one projected by a currently divided Fed board.

“We expect that concerns around central bank independence will extend into 2026, and see the upcoming change in Fed leadership as one of several reasons why risks around our Fed funds rate forecast skew dovish,” Goldman strategists said.

YEN REMAINS THE EXCEPTION

The yen was at 156.86 per U.S. dollar after rising less than 1% against the greenback in 2025. It remained close to the 10-month low of 157.90 touched in November that drew policymaker attention and raised the prospect of intervention.

The Bank of Japan hiked interest rates twice last year but that did little to improve yen performance as the cautious pace frustrated investors, with speculators reversing significant long yen positions held in April.

Traders are pricing the next BOJ rate hike as being toward the end of 2026. Min Joo Kang, senior economist at ING, expects the most likely timing to be October.

“A further fiscal push could backfire on the economy, but the current government is expected to maintain its expansionary policy stance, posing a significant risk to the economy in 2026,” Kang said in a client note.

The Australian and New Zealand dollars started the new year on the front foot. The Aussie was 0.5% higher at $0.6706 after a nearly 8% rise in 2025, its strongest yearly performance since 2020.

The kiwi snapped its three-year losing streak with a nearly 3% gain last year. On Friday, it firmed a touch to $0.5772.

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Network Rail, train firms and strategic organisations can apply for the funding, but Northwich was not successful in the last round.

The programme was launched in 2006 and the government said it had implemented step-free access at more than 260 stations as of May 2025.

Government data shows that across Great Britain, 61% of stations have step-free access.

In the North West, 58% of the region’s stations have step-free access.

Lynne Turnbull, the chief executive of Northwich-based Disability Positive, said the situation was “challenging” for those who wanted to travel to or from the town.

“It’s incredibly frustrating as a disabled woman to still be having the conversations, not just that we’re in 2025 but the same conversations we were having in 2021 following the collapse,” she said.

“The Equality Act, which has been out since 2010, has got the rights for all protected characteristics, including disability.

“Sometimes it feels like disability is the poor relation of the Equality Act.”

Play equipment based on a motoring theme could be built on the site of the former Daimler car factory if plans are approved.

The play area would be part of a public plaza in Sandy Lane, Coventry, which would provide spaces for public gatherings and meetings.

Proposals will accompany the development of up to 250 homes that will be built on the site after plans for the homes were approved in June.

Developers Dandara Central said the plaza aimed to be multi-functional, with trees and planting beds to improve the frontage of the Daimler Powerhouse building.

The features of the play area would “encourage play and movement” while linking back to the site’s heritage, the developers added.

Links between the site and the Coventry Canal will be created under the plan with a direct connection for pedestrians and cyclists between both the plaza and nearby properties.

“These connections will benefit existing residents in the local area by re-opening a crucial north-south walking and cycling connection north of the city centre,” developers said.

The Daimler building was one of the first car plants in the country and much of the site was destroyed in the Blitz.

The firm was taken over by Coventry Climax to test out forklift trucks and it designed the UK’s first forklift truck in 1946.

Existing household burgundy bins will be collected and recycled as part of North Lincolnshire Council’s “simpler” recycling system.

New bins will be sent out later this month which residents can use for dry recycling, including plastic, metal, glass, card and paper.

The authority said the new kerbside collection system will make it easier for residents to “recycle more and waste less”.

Council leader Rob Waltham said the old containers would be “recycled responsibly”.

Under the new system, 70,000 larger recycling bins will be distributed across North Lincolnshire.

A garden and food waste bin will be collected weekly with a general waste bin collected fortnightly, the authority said.

Deputy council leader Neil Poole said: “We’re upgrading the system and making it easier for residents.

“Every old bin collected is turned back into useful raw material, helping manufacturers around the country and cutting waste at the same time.”

The council said the existing bins would be turned into pellets which can be used by manufacturers to create new products.

Deliveries of the new bins and collection of the existing ones will begin shortly after the council receives its first shipment in January.

Residents who would prefer to keep their current recycling bin can opt out of the scheme through an online form.

Under the new system, 70,000 larger recycling bins will be distributed across North Lincolnshire.

A garden and food waste bin will be collected weekly with a general waste bin collected fortnightly, the authority said.

Deputy council leader Neil Poole said: “We’re upgrading the system and making it easier for residents.

“Every old bin collected is turned back into useful raw material, helping manufacturers around the country and cutting waste at the same time.”

The council said the existing bins would be turned into pellets which can be used by manufacturers to create new products.

Deliveries of the new bins and collection of the existing ones will begin shortly after the council receives its first shipment in January.

Residents who would prefer to keep their current recycling bin can opt out of the scheme through an online form.