The US dollar index ( DXY ) has cratered to a four-year low, hovering near the 95.60 mark on Wednesday ( January 28 ). For Asian investors, this isn’t just a “story from Washington” but represents a seismic shift that is re-ordering their portfolios.

The DXY measures the greenback against a basket of six major world currencies ( euro, yen, pound sterling, Canadian dollar, Swedish krona (SEK ), and Swiss franc), with the euro carrying the most weight. Hovering at 95.60 means the dollar has effectively erased all its gains from the last four years, returning to levels not seen since early 2022.

For the past few years, the dollar was the “king of the hill” due to high US interest rates, but breaking below 96.00 suggests that the “King Dollar” era is officially under siege, according to analysts.

On Wednesday morning, the US dollar notched its biggest one-day decline overnight since April’s tariff turmoil, after US President Donald Trump said he wasn't concerned about the recent slide in the US currency. But while that might be music to the ears of American manufacturers, it’s a heavy drumbeat for Asian exporters.

An important nuance is that the DXY was trading nearer 96-96.1 at times on January 28, so “hovering near 95.60” is only true for a brief session rather than a sustained level. Many sources insist that the broad dollar selling is not an ongoing collapse such as that seen in early 2022.

Gold rush

However, the plunge in the US dollar has resulted in Asian investors rushing to buy gold as a safe-haven asset, with spot gold shattering the US$5,200 per ounce ceiling on Tuesday morning.

In Vietnam, SJC gold bars hit a historic 182 million dong ( US$6,982 ) per tael, according to VietNamNet.

In China and India, the world’s two largest physical gold markets, the surge is acting as both a wealth-builder and a warning as analyst reports highlight a “structural bull cycle” where the People’s Bank of China ( PBoC ) and the Reserve Bank of India ( RBI ) are aggressively diversifying reserves away from the US dollar.

Asian investors have long viewed gold as the ultimate “anti-dollar”, but with the DXY in a “crisis of confidence”, capital is fleeing US treasuries and parking in the safety of gold.

In 2025, the price of gold increased by approximately 65%, and in just the first month of 2026, the precious metal has already risen by more than 20.5%, according to a report published by Vietnam.net.

Better than Alphabet

“The performance of gold as a safe-haven currency in the first month of 2026 alone makes even the most aggressive tech stocks look sluggish,” says an analyst.

From January 1-28, spot gold skyrocketed by 20.5%. By comparison, Alphabet gained 5%, Amazon was up 4%, while the Nasdaq 100 rose 1.8%. Nvidia was flat, while Microsoft and Apple were both in negative territory.

“In January 2026 alone, the performance gap between “safe-haven” assets ( gold ) and high-growth technology stocks has been nothing short of staggering,” the analyst notes. “While tech giants are far from crashing, they look practically stationary compared to gold’s vertical ascent.”

But it’s not all bad news for the region as a weaker dollar typically acts as a “risk-on” signal for emerging markets.

“We are seeing a massive rotation of capital into Asian equities,” says another analyst, citing a 2.4% jump in the Hang Seng Index on Wednesday, and the Kospi hitting a high of 5,000 points for the first time in 46 years, fuelled by a rotation into regional tech and AI-centric memory makers like SK Hynix on the same day.

For investors in Southeast Asia, particularly Malaysia and Indonesia, a weaker dollar provides much-needed breathing room for local central banks, allowing them to maintain lower interest rates without fear of their own currencies collapsing.

Asian investors are currently navigating a “de-dollarization” trend that is moving from theory into practice. While the export-heavy sectors are feeling the pinch, the broader market is taking the opportunity to diversify.