Dollar Strengthens as Global Markets Slip Amid Commodity Selloff

Global financial markets opened February on a cautious note as a broad commodities downturn and a stronger U.S. dollar weighed on investor sentiment. MSCI’s global equities gauge edged lower, even as Wall Street provided some support, highlighting a fragile balance between resilience in U.S. stocks and weakness across other regions.

The dollar advanced broadly, helped by stronger U.S. manufacturing data and expectations that monetary policy could remain relatively tight. The euro retreated from the $1.20 level, while the Japanese yen held steady as investors reassessed currency positioning in a shifting macro environment.

Commodity markets were the primary source of volatility. Precious metals led a sharp selloff, with gold and silver falling significantly after already steep losses in the previous session. Analysts linked the move to investor concerns that the nomination of Kevin Warsh — viewed as a policy hawk — could signal a prolonged period of higher interest rates, strengthening the dollar and reducing the appeal of non-yielding assets.

Energy prices also declined, with oil dropping nearly 5% as geopolitical tensions between the United States and Iran showed signs of easing. Industrial metals such as copper weakened as well, pressured by high inventories and softer demand ahead of China’s Lunar New Year.

For traders, the session underscored how quickly macro expectations can ripple across asset classes. Currency strength, rate outlooks, and commodity positioning are likely to remain closely linked in the near term, particularly as markets head into a week packed with economic data and central-bank developments.