The dollar index rose to a 1-week high, fueled by a drop in weekly US unemployment claims to a 1-month low. President Trump’s comments on possibly firing Fed Chair Powell and strength in the Chinese yuan restrained further gains for the dollar. The Fed’s next rate cut probability is at 15%.

EUR/USD saw a decline due to the dollar’s strength, worsened by the ongoing Russian-Ukrainian war. Swaps indicate a 1% chance of an ECB rate hike in February. Meanwhile, USD/JPY rose as the yen weakened against the dollar, with a 1-week low. The BOJ has a 1% rate hike probability.

Gold and silver prices plummeted as the dollar index surged to a 1-week high. CME raised margins on precious metals, leading some traders to exit positions. Bullish factors for precious metals include central bank demand, FOMC’s liquidity injection, and geopolitical risks. Fund demand for gold and silver remains strong.

Read more at Yahoo Finance: Dollar Finishes Higher and Precious Metals Plunge in Year-End Trading