Scott Kanowsky Wed, January 28, 2026 at 10:01 PM GMT+8 1 min read

In this article: EUR=X

EURUSD=X

USD=X

DX-Y.NYB

Investing.com - The extra return investors demand for holding assets denominated in U.S. dollars is building and could grow further, according to analysts at Barclays.

In a note, the analysts including Themistoklis Fiotakis and Lefteris Farmakis argued that recent comments from President Donald Trump which appeared to be in favor of a weaker dollar have further widened the so-called "dollar risk premium."

As evidence, they flagged a broadening gap between U.S. interest rate expectations and the exchange rate between the euro and the greenback.

"Rate gauges imply EUR/USD around the mid-teens and it is already trading" above the $1.20 level for the first time since 2021, the analysts wrote, although they added that such "relationships are no laws of gravity."

Against this backdrop, the analysts argued that the euro had become the "primary anti-dollar trading instrument."

On Tuesday, Trump waved away worries over a steep slide in the dollar this month to almost four-year lows, arguing that the value of the currency was "great." Traders, already with one eye on a Federal Reserve interest rate decision this week, continued to sell the dollar in the wake of the statement.

Pressure was also coming from the yen, which has strengthened against the dollar on speculation of a joint Japanese-U.S. intervention to support the Japanese currency.

For the week, the dollar is on track to log its biggest decline since April.

U.S. dollar risk premium is building after Trump comments, Barclays says

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