Last night's market conditions were indeed intriguing. First, the Washington Post reported on the 'Trump team's tariff plan for key imported goods.' Upon this news breaking, the market surged, while the dollar index dropped significantly. However, it wasn't long before Trump denied the news report. Logically, the 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 dollar index's failure to regain lost ground can be interpreted in two ways. First, the market may believe that Trump will not be as aggressive in tariff policy as reported, and even though he denied the news this time, the market has certain expectations of his relatively moderate actions afterward, hence it did not drive the dollar index to rebound strongly; second, the market thinks Trump’s move is an attempt to test the market's reaction, causing investors to become more cautious and hesitant to push the dollar index back up, leading to a rebound that does not last, and subsequently falling into a slight downward trend.

Looking back at history, after the 2016 election, the dollar displayed a specific pattern. At that time, the dollar rose steadily until mid-January 2017 when Trump officially began his first term, at which point the dollar index peaked and then began to decline. The current performance of the dollar is quite similar to the situation at the end of 2016 and early 2017, with the underlying logic being that the market may have overly anticipated the aggressiveness of Trump's policies after he took office, and last night's 'fake news' incident acted as a trigger, prompting the market to reconsider whether there were excessive expectations, thereby affecting the trend of the dollar index.

In addition, the hawkish remarks made by the President of the Bank of Japan that night also had a significant impact on the market, raising expectations for a rate hike by the Bank of Japan in late January, which in the context of global monetary competition, created certain pressure on the dollar index.