The dollar index rose by +0.18% after President Trump backed off from imposing tariffs on European nations that oppose his Greenland acquisition. US Dec pending home sales fell -9.3%, the largest decline in 5.5 years. Markets predict a 5% chance of a -25 bp rate cut at the next FOMC meeting.

President Trump’s tariff threats and Fed liquidity injections are pressuring the dollar. The euro fell by -0.36% as the dollar rallied. Swaps show a 0% chance of a +25 bp rate hike by the ECB. USD/JPY rose by +0.18% as the yen weakened due to lower T-note yields and concerns about Japan’s fiscal policies.

Gold and silver prices fluctuated as precious metals saw safe-haven demand amid global uncertainty. Gold prices dropped $50 after Trump’s Greenland announcement. Central bank demand for gold remains strong, with PBOC reserves increasing by +30,000 ounces in December. Fund demand for precious metals is high, with gold ETF holdings at a 3.25-year high.

Read more at Yahoo Finance: Dollar Rallies as President Trump Backs Off Tariff Threats on Europe