The dollar rose by +0.19% following the end of the US government shutdown. Yen weakness supported the dollar, reaching a 1.5-week low. The dollar gained further strength from the Jan ISM services index, despite weaker-than-expected Jan ADP report of +22,000 job additions.

The dollar gained support from President Trump’s nomination of Kevin Warsh as the next Fed Chair. Warsh is considered more hawkish and inflation-focused. The dollar faces pressure from a growing budget deficit and political polarization.

Euro fell by -0.12% due to downward revisions in Eurozone Jan core CPI and Jan composite PMI. Short covering and position squaring limited losses. The Eurozone Dec PPI fell -2.1% y/y, the largest drop in 14 months.

USD/JPY rose by +0.73%, reaching a 1.5-week high against the yen. The yen is pressured ahead of an expected election win by PM Takaichi, raising budget stimulus risks. Higher T-note yields and an upward revision in Japan Jan S&P services PMI were supportive of the yen.

Gold and silver prices rose on Wednesday due to escalating tensions in the Middle East. Safe-haven demand increased after the US Navy shot down an Iranian drone and reports of potential military strikes against Iran. Precious metals fell after dollar strength sparked long liquidation.

Precious metals are supported by safe-haven demand amid geopolitical risks and dollar debasement trade. Increased liquidity in the financial system boosts demand for metals. Strong central bank demand and fund demand for gold remain high, supporting prices.

Read more at Yahoo Finance: Dollar Gains as US Government Shutdown Ends and Stocks Fall