US Dollar evident as Yen intervention and shutdown fears arise

A mixed start for European markets has seen the FTSE 100 enjoy a positive session thus far, with financial names such as HSBC, NatWest, Prudential, and Barclays on the rise alongside defence names Rolls-Royce and BAE Systems. Notably the major drag comes from the commodity sector, with miners Fresnillo, Anglo American, and Antofagasta leading the way lower after yesterday’s surge higher for the gold, silver, palladium, and copper met a sharp reversal. The most notable highlight of that move was the 14% rise in silver that was wiped out to form the biggest daily trading range in silver on record. Nonetheless, with silver up 8% again this morning, yesterday’s fears around a potential market top in the precious metals space are easing.

The Nasdaq looks set to open in the green, with traders waking up to the prospect of a fresh post-earnings surge for Mag7 stocks. Coming at a time where the gains seen in the US stock market have been primarily driven by the remaining 493, the Mag7 market cap shares of the S&P 500 has dropped from 33% to 31% over the past two-months. This is undoubtedly a healthy development and eases concerns that these tech giants are set to tumble on the notion that bumper profits have already been priced in ahead of time. There is a hope that the fact that big tech has been largely flying under the radar of late means we are set for a bump higher for the likes of Microsoft, Meta, Tesla, and Apple when they report over the coming days. 

The dollar continues to find itself on the back-foot, with DXY falling into a four-month low yesterday. Interestingly, while traders may consider the weakness of the dollar to be a reflection of growing expectations of a US government shutdown this week, the evidence seen over the course of the 43-day shutdown that started in October 2025 was that the dollar actually gained traction. Undoubtedly there is an element of haven demand in play, but faith in the dollar as the primary source of safety appears to have disappeared under Trump. Meanwhile, with the US and Japan gearing up to potentially enact FX intervention that would see the Fed sell dollars and buy the yen, it comes as no surprise to see the likes of gold and the Swiss Franc provide the two reliable havens right now.