Last night's market situation was indeed intriguing. First, the Washington Post reported on the 'Trump team's tariff plans for key imported goods.' Upon the release of this news, the market surged, while the US dollar index fell sharply. However, shortly after, Trump came forward to deny the news report. Logically, the US dollar index should have taken this opportunity to recover its previous losses, but the actual situation was not so.

From the perspective of market reaction, the US dollar index's failure to recover its lost ground can be interpreted in two ways. First, the market may believe that Trump will not be as aggressive in tariff policies as reported, and even though he denied the news this time, the market has certain expectations for his subsequent relatively mild actions, thus not driving the US dollar index for a strong rebound; second, the market thinks that Trump's move is an attempt to test market reactions, leading investors to become more cautious and hesitant to push the US dollar index back up, resulting in a rebound that is not sustained and subsequently falls into a slight decline.

Looking back at history, after the 2016 election, the US dollar showed a specific pattern. At that time, the dollar rose steadily until mid-January 2017 when Trump officially began his first term, and then the dollar index peaked and began to decline. The current performance of the dollar is quite similar to the situation at the end of 2016 and the beginning of 2017. The underlying logic is that the market may have overestimated the aggressiveness of Trump's policies after taking office, and last night's 'fake news' incident served as a catalyst, prompting the market to reflect on whether there were excessive expectations, which in turn affected the movement of the US dollar index.

In addition, the hawkish remarks from the Bank of Japan's governor that night also had a significant impact on the market. This statement significantly raised expectations for a rate hike by the Bank of Japan in late January. In the context of global monetary competition, this created a certain pressure on the US dollar index.