The dollar index rallied to a 1-week high on Monday, boosted by President Trump’s nomination of Kevin Warsh as the next Fed Chair. The US Jan ISM manufacturing index saw its strongest expansion in over 3.25 years, further supporting the dollar. Hawkish comments from Atlanta Fed President Bostic also buoyed the dollar.

The partial US government shutdown entered its third day on Monday but is expected to be brief. The House may vote on a spending bill later in the week following a tentative deal between President Trump and Senate Democrats to avert a shutdown. The deal funds the Homeland Security Department for two weeks.

The Eurozone Jan S&P manufacturing PMI was revised upward to 49.5 from 49.4, while German Dec retail sales met expectations. Swaps are pricing in a 2% chance of a rate hike by the ECB. EUR/USD fell due to a stronger dollar, but found support from economic data.

USD/JPY rose on Monday as the yen fell to a 1-week low against the dollar. Japanese Prime Minister Takaichi’s comments on a weak currency further weakened the yen. The yen is also under pressure due to upcoming elections and expectations of a BOJ rate hike.

Gold and silver prices dropped to 4-week lows on Monday due to a stronger dollar and easing geopolitical risks. Silver briefly rose before turning lower again. Precious metals also faced selling pressure after President Trump’s nomination of a hawkish Fed Chair candidate.

Demand for precious metals remains strong amid geopolitical uncertainties and a weakening dollar. Central bank demand for gold is rising, with China’s PBOC boosting its gold reserves. Fund demand for precious metals is also high, with long holdings in gold ETFs at a 3.5-year high.

Read more at Yahoo Finance: Dollar Rallies on Strong US Manufacturing News and Hawkish Bostic Comments