USD: Broad 'sell everything' mood hits global markets – Scotiabank

FXStreet Insights Team FXStreet

Global stocks and bonds are under pressure, but the standout move is a sharp sell-off in US assets, with the dollar extending losses triggered by Trump’s renewed tariff and Greenland threats ahead of Davos. Core European currencies are outperforming, led by a 1% jump in the Swiss franc, while rising gold prices and FX volatility signal growing investor expectations of further USD weakness and a potential DXY retest of the 97.75–98.00 area, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

US assets lead decline as USD slides sharply

"It feels like a 'sell (almost) everything' morning as global stocks and bonds decline. The real story is the broad decline in US assets, however, with the USD sliding sharply in an extension of the weakness seen Monday in response to President Trump’s Greenland/tariff threats. Just ahead of Davos, where the president speaks tomorrow, he has also chosen to pick fights with some European counterparts which may or may not be related to the apparently faltering support for his Gaza 'Board of Peace'."

"Core European currencies are outperforming and the CHF continues to lead gains with a 1% rise on the day. The EUR is nearly a cent higher from yesterday’s close while EM FX is lagging somewhat. Crude oil is marginally firmer but gold continues to rise strongly (+1.4% to a new high), reflecting investor preference for a non-dollar haven which, at the margin, adds to broader dollar headwinds. FX volatility is firmer and risk reversals are repricing in favor of more USD weakness in a sign that investors are anticipating further USD losses."

"Positioning data is showing some softening in overall exposure to the USD but this is perhaps best characterized as leaving investors in aggregate now just overweight USD relative to benchmarks, down from very overweight late last year. That leaves the door open to some further weakness in the USD in the coming months, especially if investors opt to rebalance portfolios away from US assets in response to belligerent US policies. Hefty DXY losses so far today reaffirm resistance in the low/mid-99 zone for the index and point to a retest of the late 2025 lows around 97.75/00 in the short run."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD clings to multi-day peaks below 1.3500

GBP/USD trades with marked gains on Friday, now giving away some gains following an earlier surpass of the key 1.3500 yardstick. Indeed, Cable gathers fresh steam amid the strong offered stance in the Greenback, all after US NFP badly missed expectations in July.

EUR/USD: Post-NFP bounce falters around 1.1580

EUR/USD reverses Thursday’s decline and trades with solid gains in the 1.1560 region, or two-month peaks, on Friday. The pair’s firm performance comes in a context of a sharp correction in the US Dollar as investors continue to assess disheartening US NFP readings.

How Wall Street rigs the game [Video]

In this week’s Live from the Vault, Andrew Maguire is joined by Peter Antico and Sean Stone to discuss the Paradigm of Money - an in-depth expose of financial market corruption, from naked shorting to the two-tier system that protects Wall Street.

XRP Price Forecast: XRP nears critical $1.00 support

Ripple (XRP) remains pressured on Friday, trading around $1.03 at the time of writing. The token appears to hold this current level as support but lacks a catalyst to sustain a knee-jerk rebound toward the next key resistance at $1.10.

Is Gold about to enter its biggest bull run since 2020?

Gold has stormed back into the spotlight and its next move could leave late buyers chasing. On August 5, the yellow metal surged almost 7% – roughly $174 – to close near $4,308 an ounce, posting one of its biggest daily advances in recent history. A weaker U.S dollar, falling Treasury yields, changing Federal Reserve expectations and renewed safe-haven demand all struck at once.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.