Just days after tumbling to a seven-week low on a weak jobs report, the dollar is back on the front foot. The US Dollar Index climbed to four-day highs above 103.50, and the rebound is already spilling over into precious metals and the yen.
Rising yields across global bond markets and a broader shift toward risk-on sentiment are driving the move, reversing much of the dollar weakness that followed Friday’s soft payrolls data. USD/JPY extended its advance for a third straight session as the yen came under renewed selling pressure, adding to the currency’s difficult week.
The turnaround is putting fresh pressure on gold and silver, both of which had rallied sharply earlier in the week as traders priced in a more dovish path for the Federal Reserve following the weak jobs number. A firmer dollar typically weighs on dollar-denominated metals, since it makes them relatively more expensive for holders of other currencies, and early trading suggests some of that earlier momentum in precious metals is now cooling.
The whiplash between Friday’s dollar selloff and this week’s rebound is a reminder of how quickly sentiment can shift once markets fully digest a single data release. Whether this recovery has staying power will likely depend on upcoming yield trends and any fresh signals from Federal Reserve officials in the days ahead.
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