Trade British Pound / US Dollar (GBPUSD)

The dollar index slipped below 97 as markets awaited delayed January jobs data, with weak retail sales and reports of China urging banks to cut US Treasury exposure adding pressure on the currency.

The dollar index stayed under pressure on Tuesday as fears of softer foreign demand for US assets, reports of Chinese banks cutting Treasury holdings, expectations of delayed US jobs and inflation data, and a firmer yen on intervention talk weighed on the greenback.

The dollar index slipped to around 97.5 as delayed U.S. data due to the shutdown kept markets cautious, with investors expecting steady Fed policy until summer while risk appetite and Japan’s election added pressure against the yen.

Global markets turned cautious on Friday as risk sentiment weakened, led by a sharp drop in U.S. tech futures after Amazon’s heavy AI spending plans rattled investors. 

Markets tilted in favor of the US dollar after strong services data reinforced concerns over persistent inflation. 

The dollar index held near 97.4 on Wednesday, pausing its recent advance as the partial US government shutdown postponed key economic releases and kept traders cautious. 

The US 10-year Treasury yield held near 4.27% as strong manufacturing data and Kevin Warsh’s hawkish Fed nomination supported growth confidence, while a partial government shutdown threatened to delay the upcoming jobs report.

Precious metals face heavy pressure as markets pivot to a less dovish view of Kevin Warsh’s Fed nomination, strengthening the dollar. This selloff is intensified by CME Group raising margin requirements, forcing leveraged liquidations and accelerating the retreat for gold and silver.

A modest recovery in the U.S. dollar weighed on major currencies and precious metals into the end of the week. 

The dollar index steadied above 96 after hitting a four-year low, supported by Treasury Secretary Scott Bessent’s reaffirmation of a strong dollar policy despite earlier signals favoring a weaker currency.