- The overwhelming victory of the LDP in Japan caused a decline in the USDJPY.
- China has been buying gold for 15 months straight, supporting the price.
Improved global risk appetite undermined the . It posted its best daily rally since May amid easing fears about the negative impact of artificial intelligence on technology and other company stocks. Bitcoin managed to hit bottom and followed the rally in the US stock indices. It returned above $5,000 per ounce, while demand for the dollar as a safe haven asset decreased.
Traders are taking profits from long positions in the USD index after the best week for the US dollar since early January, as important reports approach. The publication of data on employment, inflation and will clarify the situation of the American economy and will allow conclusions to be drawn about the situation. The futures market sees a 70% chance of a rate cut in June and a 33% chance for April. Growing confidence in a rate cut, if not undermined by US statistics, will inspire EURUSD bulls.
Quotes rose in anticipation of the result of the vote in the lower house. However, when the market opened, investors preferred to take profits, which strengthened the yen by almost 1%.
The Liberal Democratic Party won a record 316 seats in the lower house of Parliament. Together with its coalition partner, the Japan Innovation Party, it holds 354 of the 465 seats, allowing the LDP to pursue its policies without the approval of other parties. Takaichi contributed to the euro's rise to an all-time high.
Gold once again exceeded $5,000 an ounce thanks to the support of central banks. The People's Bank of China reported its 15th consecutive month of gold bullion purchases. Its precious metal reserves increased by 40,000 ounces in January. The series began in November 2024 and has continued without interruption since then, despite price fluctuations.
The process of acquiring gold by central banks slowed down in 2025 to 860 tons, after 1,000 tons in the previous three years. However, regulator activity in the precious metals market remains high, supporting the gold price.
He FxPro Analyst team
