The second half of the final week of January revealed that markets are being driven less by hard data and more by expectations and geopolitical concerns. The US dollar, despite attempts to stabilize, remains highly volatile, while safe-haven assets are demonstrating fresh all-time highs before sliding into corrective phases.
The January FOMC meeting unfolded, with the Fed not declaring victory over inflation prematurely. Jerome Powell attempted to maintain a hawkish tone, but markets largely dismissed it.
Insider view: Christopher Waller’s vote in favor of a rate cut caused a stir. Behind the scenes, it was interpreted as a signal that Waller’s chances of becoming Fed Chair have spiked dramatically.
Result: Although the probability of a June rate cut declined to 61%, EUR/USD bulls remained unfazed. The dollar shrugged off hawkish rhetoric, as investors placed greater weight on potential political pressure on the Fed from the White House.
Markets continue to debate the Trump administration’s intention to weaken the dollar to support US exports.
Conflicting opinions: Secretary of the Treasury Scott Bessent publicly reaffirms his commitment to a “strong dollar,” yet his previous remarks suggest a more nuanced stance. Trump, meanwhile, openly frames a weaker dollar as a tool for competitiveness.
Trap: Analysts caution that US high-tech exports are largely insensitive to exchange-rate fluctuations. At the same time, foreign investors—whose profits already dropped by 14% in 2025 due to volatility—are likely to reconsider purchases of overvalued US assets. This forces them to opt for additional hedging, which adds further pressure on the dollar
The Australian dollar surged to three-year highs, becoming one of the week’s biggest surprises.
Driver: Accelerating inflation alongside a drop in unemployment to 4.1%.
Forecast: The probability of a Reserve Bank of Australia (RBA) rate hike in February has jumped to 60%, positioning the AUD as the most attractive currency among largely stagnant peers.
Gold (XAU) and Silver (XAG): From Euphoria to Sharp CorrectionAfter gold jumped above $5,500 on Thursday, the market experienced a textbook “dump.
Record selloff: Gold posted its steepest one-day decline since October, sliding as much as 5.7%, while silver plummeted even harder, 8.4%.
Expert insight: Phil Streible, Chief Market Strategist at Blue Line Futures, believes that the market has “hit some peak euphoria.” As the US stock market turned lower, investors started selling everything across the board—including metals—to cover losses and lock in profits.
Technical overheating: In January alone, gold surged more than 20%, making a correction unavoidable. Analysts at Julius Baer Group note that when markets are overheated and liquidity dominates fundamentals, even a minor trigger can spark a sharp selloff.
Currency link: The pullback in metals coincided with a modest 0.3% rebound in the dollar index. This small move was enough to unleash a wave of stop-loss orders among traders who bought gold near the highs.
Current situation: Gold remains in the red zone. This suggests that the market needs a pause following the devaluation rally caused by concerns over the Federal Reserve’s independence.
Unlike XAU, bitcoin slid to its November 2025 lows at $82,159.
Reason: Massive ETF outflows exceeding $1.1 billion over the week. Investor disappointment grew as BTC failed to perform as a safe-haven asset during the recent escalation.
Situation: While gold has been hitting record highs, the crypto market is grappling with uncertainty and liquidations. Bitcoin must hold the $80,000 level, or else the drop may accelerate toward $75,000.
The loonie remains supported by rising oil prices, with WTI trading near $66, yet the threat of trade wars continues to loom over it.
Figures: The Bank of Canada projects GDP growth slowing to 1.1% in 2026 due to US tariff pressures.
Risk: Donald Trump has threatened 100% tariffs if Ottawa deepens ties with China. That being said, strong economic integration gives hope that actual tariffs will remain in the 5–7% range for most goods.
Weekly summary: Volatility faded by Friday, with key targets being reached. Holding positions open over the weekend remains extremely risky. Potential strikes on Iran could trigger major market gaps on Monday. In times of heightened uncertainty, capital preservation is the best profit strategy.
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