USDX Pressured from Shutdown Risks; Tech Giants Prepare for Earnings Week

The Euro extended its gains on Monday, rising more than 0.40% against the US Dollar as broad Greenback selling emerged amid heightened geopolitical tensions and speculation over coordinated foreign-exchange intervention by US and Japanese authorities.

Renewed trade-war concerns helped underpin last week’s advance in EUR/USD. While US President Donald Trump eased tariff pressure on Europe by shelving proposed 10% duties linked to Greenland, tensions escalated elsewhere. Trump threatened to impose tariffs of up to 100% on Canadian goods should Ottawa pursue a trade agreement with China, reviving fears of a broader trade confrontation. At the same time, speculation surrounding a possible coordinated FX intervention by the US and Japan weighed on the Dollar.

Investor attention now shifts to the Federal Reserve’s policy decision on Wednesday, January 28. While markets widely expect interest rates to remain unchanged, Fed Chair Jerome Powell’s press conference is seen as the key event for policy guidance, particularly following the recent Department of Justice indictment. Earlier on Monday, US Durable Goods Orders surprised to the upside, rising 5.3% month-on-month in November after October’s 2.1% decline, well above expectations of a 2.3% increase. Core capital goods orders—a closely watched indicator of business investment—also exceeded forecasts, increasing 0.5% MoM. Looking ahead, traders will monitor Tuesday’s US releases, including the ADP Employment Change four-week average, housing data, and Consumer Confidence.

In the Eurozone, Germany’s Ifo Business Climate Index was unchanged in January, signaling a lack of improvement in business sentiment. Ifo President Clemens Fuest noted that the German economy has started the new year with limited momentum. On Tuesday, remarks from European Central Bank officials—including ECB President Christine Lagarde and Bundesbank President Joachim Nagel—are expected to provide further insight into the region’s economic outlook and monetary policy stance.

Gold prices remain supported as sustained safe-haven demand and expectations of Federal Reserve rate cuts continue to underpin the precious metal. Ongoing geopolitical tensions, strong central-bank purchases, and solid retail demand continue to provide a firm foundation for Gold. Persistent global uncertainties have helped offset a generally constructive risk environment, reinforcing the metal’s appeal as a defensive asset.

A mild recovery in the US Dollar may limit further upside in the near term, as investors appear reluctant to take aggressive positions ahead of the Federal Reserve’s policy announcement on Wednesday. Markets will be closely watching for guidance on the Fed’s expected rate-cut trajectory, which will play a critical role in shaping Dollar dynamics and determining Gold’s next directional move.

Safe-haven flows have been reinforced by renewed trade tensions and elevated geopolitical risks. US President Donald Trump recently warned of imposing 100% tariffs on Canada should it proceed with a trade agreement with China, adding to uncertainty following earlier tariff threats related to Greenland that were later withdrawn.

At the same time, the prolonged Russia–Ukraine conflict continues to weigh on global sentiment. Recent peace talks in Abu Dhabi ended without a breakthrough, as Ukraine rejected Russia’s demand that it cede the entire Donbas region as part of any settlement.

These developments, combined with a softer US Dollar and dovish Federal Reserve expectations, have helped push Gold higher for a seventh consecutive session. Market participants currently anticipate up to two additional Fed rate cuts later this year, a view that recently dragged the Dollar to a four-month low.

Oil prices slipped early on Tuesday as investors monitored the potential resumption of crude supply from Kazakhstan, though losses were limited by significant production disruptions caused by a severe winter storm across the United States.

Kazakhstan is preparing to resume output at its largest oil field, the country’s energy ministry said on Monday, although industry sources noted that production volumes remain subdued. Meanwhile, the Caspian Pipeline Consortium (CPC) announced that it had restored full loading capacity at its export terminal on Russia’s Black Sea coast following the completion of maintenance work at one of its three mooring points.

Price declines were capped by weather-related disruptions in the United States, where a massive winter storm curtailed crude production and disrupted refinery operations along the Gulf Coast. Several Gulf Coast refineries also reported operational issues linked to freezing conditions, raising concerns about potential fuel supply disruptions.

Geopolitical tensions further underpinned oil markets. A US aircraft carrier and accompanying warships arrived in the Middle East on Monday, according to US officials, expanding President Donald Trump’s ability to defend US forces or potentially escalate military action against Iran.

Looking ahead, supply policy from OPEC+ remains a key focus. Eight members of the producer group—Saudi Arabia, Russia, the UAE, Kazakhstan, Kuwait, Iraq, Algeria and Oman—are expected to maintain their pause on output increases for March. A decision is anticipated at the group’s meeting on February 1, according to OPEC+ delegates.

US equities finished higher on Monday as investors positioned for a pivotal week featuring a Federal Reserve policy meeting and a heavy slate of corporate earnings, against a backdrop of elevated geopolitical tensions.

The focus now turns to the Federal Reserve’s two-day policy meeting, which concludes on Wednesday. Markets widely expect the central bank to leave interest rates unchanged following three consecutive rate cuts at prior meetings.

Attention is also on tensions between US President Donald Trump and Fed Chair Jerome Powell, which have raised concerns about the central bank’s independence. Earlier this month, Powell disclosed that the Justice Department had opened a criminal investigation into him, a move he described as politically motivated.

Corporate earnings will also play a critical role in shaping market direction. Around 20% of S&P 500 companies are set to report this week, including four of the so-called “Magnificent Seven” technology giants.

Tesla is due to report on Wednesday, alongside Microsoft and Meta Platforms, while Apple will release results on Thursday. Investors will be closely watching for signs of resilient consumer demand, progress in artificial intelligence initiatives, and margin trends amid rising costs and geopolitical uncertainty.

In sector-specific moves, airline stocks came under pressure. Shares of American Airlines, Delta Air Lines, and United Airlines fell on concerns over flight disruptions caused by a severe winter storm affecting large parts of the US.