Dollar Finishes Higher and Precious Metals Plunge in Year-End Trading

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) reached a 1-week high, finishing up by +0.07%, driven by rising T-note yields and a drop in weekly US unemployment claims to a 1-month low of 199,000, which was a decrease of -16,000 from previous claims [1][3] - The markets are currently pricing in a 15% probability of a -25 basis point rate cut at the upcoming FOMC meeting on January 27-28 [3] Group 2: Fed Policy and Market Sentiment - Questions regarding the independence of the Federal Reserve are limiting the dollar's gains, particularly after President Trump suggested he might fire Fed Chair Powell [2] - The dollar is under pressure as the Fed is expected to cut interest rates by approximately -50 basis points in 2026, while other central banks like the BOJ and ECB are expected to raise or maintain rates, respectively [4] - Concerns about President Trump's potential appointment of a dovish Fed Chair, with Kevin Hassett being the likely candidate, are also bearish for the dollar [5] Group 3: Euro and Global Market Dynamics - The EUR/USD pair fell to a 1-week low, down by -0.03%, as the dollar's strength pressured the euro, compounded by ongoing concerns regarding the Russian-Ukrainian war [6]