Shortly after the New Year, the U.S. launched a surprise attack on Venezuela and detained its president. This appears aimed at eliminating China’s influence in Venezuela, but it is a clear violation of international law, and future developments are concerning. Looking at financial market trends at the start of the year, it’s what’s called risk-on. Stock markets are firm, precious metals are rising, and cryptocurrencies are strong.

Australia’s November CPI, released on Wednesday, came in at 3.4%, below the expected 3.6%. However, since Australia’s monetary policy is winding down its rate-cutting cycle, the Australian dollar initially sold off but remained firm. Many forecasts predict relatively strong performance for Oceania currencies in 2026, and this movement seems to support such predictions. The dollar is firm, particularly against European currencies.
Many economists had envisioned a scenario where increased German fiscal spending would strengthen the euro. However, the situation appears to be changing. The US’s overt prioritization of its own interests seems to be exerting intense negative pressure on its European allies. Under such conditions, yen weakness typically advances in the foreign exchange market. Yet, USD/JPY is not rising smoothly, and yen crosses are flat. The pound is showing unexpectedly strong resilience. Typically, such times see gold surge and stock prices fall, but the pound quickly priced in that decline and challenged new highs – a positive sign. USD/JPY rose, supported by robust Japanese stocks, but with Governor Ueda signaling caution on rate hikes, it cannot match the performance of equities. The market will likely continue to carefully pick up dips.