The dollar index rose by +0.57% to a 1-week high on carryover support from Trump’s nomination of Kevin Warsh as the next Fed Chair, who is more hawkish. The Jan ISM manufacturing index expanded at the strongest pace in over 3.25 years.

The US government shutdown enters its third day, expected to be brief with a vote on the spending bill imminent. President Trump’s tentative deal with Senate Democrats to avert shutdown includes funding the Homeland Security Department for two weeks.

The Eurozone Jan S&P manufacturing PMI revised upward to 49.5 from 49.4, while German Dec retail sales rose +0.1% m/m as expected. Swaps are pricing a 1% chance of an ECB rate hike on February 5.

USD/JPY rose by +0.49% as the yen fell to a 1-week low on comments from Japanese PM supporting a weak currency, sparking speculation of export industry opportunities. Early polls show ruling party likely to win more seats, deepening fiscal concerns.

Gold down -0.40% and silver up +0.58%. Dollar rally to 1-week high bears on metals prices. Geopolitical risks ease undercut safe-haven demand. Silver supported by Jan ISM manufacturing report showing strong expansion.

Precious metals under pressure from Trump’s nomination of Warsh as Fed Chair and expectations of short government shutdown. Supported by safe-haven demand amid geopolitical risks and dollar debasement. Increased liquidity boosts demand as store of value.

Central bank demand for gold up, China’s PBOC reserves rose in December, and global central banks purchased 220 MT of gold in Q3. Fund demand strong, with long holdings in gold ETFs at a 3.5-year high and in silver ETFs at a 2.25-month low last Friday.

Read more at Yahoo Finance: Dollar Rallies on US Manufacturing Strength