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Dollar Index Sees Continued Downward Pressure
Yahoo Finance· 2025-12-26 16:00
Group 1: Geopolitical Developments - Ukrainian President Zelensky anticipates a meeting with President Trump to discuss a potential peace deal involving a demilitarized zone in eastern Ukraine in exchange for security guarantees from the US and Europe [1] - The US Coast Guard has forced the sanctioned oil tanker Bella 1 to divert from Venezuela as part of President Trump's blockade on sanctioned oil tankers [2] - The US has launched strikes on ISIS targets in Nigeria in collaboration with the Nigerian government to address rising terrorist attacks [3] Group 2: Currency and Economic Indicators - The dollar is under pressure as the Federal Reserve increases liquidity by purchasing $40 billion a month in T-bills, with concerns about a dovish Fed Chair appointment impacting the dollar's strength [4][5] - The dollar index has decreased by -0.09%, extending a weekly decline of approximately -0.7%, despite a stronger-than-expected US GDP report of +4.3% [6] - The euro has gained support from ECB members indicating satisfaction with the current interest rate outlook, while the yen has shown volatility due to mixed economic indicators and comments from Japan's Finance Minister [7][8][9] Group 3: Precious Metals Market - Gold and silver have reached new all-time highs, supported by geopolitical concerns and the US's military actions, alongside a positive US GDP report [11] - Central bank demand for gold remains strong, with China's PBOC increasing its reserves and global central banks purchasing 220 MT of gold in Q3, a +28% increase from Q2 [13] - Fund demand for precious metals is robust, with silver ETF holdings reaching a 3.5-year high and gold ETF holdings recovering close to a 3.25-year high [14]