Iraq Economic News and Points To Ponder Friday Morning 1-23-26
Dollar Heads For Sharp Weekly Drop As Yen Slides
2026-01-23 02:55 Shafaq News The yen stayed under pressure after the Bank of Japan held rates steady on Friday, as expected, while the U.S. dollar headed for its steepest weekly drop since June as geopolitical tensions and abrupt policy shifts around Greenland unsettled investors.
The yen was slightly weaker at 158.54 following the BOJ's rate decision and after it raised its economic and inflation forecasts, highlighting the central bank's readiness to continue hiking still-low borrowing costs.
Last month, the BOJ raised its policy interest rate to a 30-year high but that has not helped the frail yen. Traders are concerned that a break beyond 160 per dollar could prompt Tokyo to step into the currency market to support the yen.
Moh Siong Sim, FX strategist at OCBC, said the market was hoping the yen's weakness might trigger a more forceful BOJ response but the central bank maintained the same rhetoric - an outcome that was pretty neutral for markets.
"After all, yen indirectly fits into the economic projections if the weakness is sustained," he said.
The spotlight will now be on comments from Governor Kazuo Ueda to gauge when the next hike will come and whether there is any hawkish tilt to support the yen. Ueda will hold a news conference to explain the decision at 0630 GMT.
"Governor Ueda in his remarks will likely lean into a more hawkish direction, which may keep the next meetings ‘live’ for a further policy rate hike," said Fred Neumann, chief Asia economist at HSBC.
"The Board appears to be leaning more hawkish as well, with one dissenter at today's meeting indicating that further policy rate hikes are on the table."
The yen has been under relentless pressure since Sanae Takaichi took over as Japan's prime minister in October, dropping more than 4% on fiscal concerns and hovering near levels that have spurred verbal warnings and intervention fears.
A bond market rout this week underscored investor nerves about Japan's fiscal position as Takaichi called a snap election for February and promised tax cuts, sending Japanese government bond yields to record highs. They have recovered somewhat since then but investors remain skittish.
Carol Lye, portfolio manager at Brandywine Global, said the authorities have to come up with a more concrete plan to calm the markets. "If there's no action, then it's just words. It's not going to anchor the market down."
"And until they do, I think there's still room for the JGBs across the entire curve to continue being volatile. The rate hikes are also not coming in quickly enough."
DOLLAR SELLING MOMENTUM
The shifting geopolitical landscape has weighed on sentiment this week as Trump said he had secured U.S. access to Greenland in a deal with NATO that came as he backed off tariff threats against Europe and ruled out taking the autonomous territory of Denmark by force.
The dollar has borne the brunt of investor angst in the currency markets as U.S. assets were pummelled at the start of the week amid the intensifying geopolitical tensions.
The dollar index , which measures the U.S. currency against six units, was at 98.366 after dropping 0.58% in the previous session, on course for a 1% slide, its worst weekly performance since June 2025.
The euro was steady at $1.1746, hovering near the three-week high it touched earlier this week, while sterling fetched $1.3496, near a two-week high hit in the previous session.
The Australian dollar was steady at $0.6841, while the New Zealand dollar was 0.3% weaker at $0.59105.
Thierry Wizman, global FX & rates strategist at Macquarie Group, said while a Greenland deal solves the immediate problem of tariffs and invasion, it doesn't solve the core issue of the seeming alienation of allies from one another.
"And that's not a good place to be if you want to preserve the USD's reserve-currency status.”
(Reuters) https://www.shafaq.com/en/Economy/Dollar-heads-for-sharp-weekly-drop-as-Yen-slides
Precious Metals Surge To Records As Investors Flee US Assets
Economy & Business Breaking Gold 2026-01-23 Shafaq News Gold notched another record high on Friday, while silver and platinum also extended gains to hit all-time peaks, powered by diminishing confidence in U.S. assets on account of geopolitical tensions and economic uncertainty.
Spot gold was up 0.4% at $4,957.10 per ounce, as of 0536 GMT, after scaling a record $4,966.59 earlier in the day.
U.S. gold futures for February delivery added 0.9% to $4,958.30 per ounce.
"Faith in the U.S. and its assets have been shaken, maybe permanently, and this is driving money into precious metals. So the word rupture has been thrown around. I don't think that's an exaggeration," said Kyle Rodda, a senior market analyst at Capital.com.
The dollar index hovered near a more than two-week low on Friday, having fallen 1% in the course of the week, making greenback-priced metals cheaper for overseas buyers, while Wall Street's main indexes saw a sharp sell-off earlier in the week as investors were spooked by fresh tariff threats from U.S. President Donald Trump on the EU, before recovering.
EU leaders heaved a sigh of relief over Trump's U-turn on Greenland as they met for an emergency summit in Brussels late on Thursday while issuing a warning that they were ready to act if Trump threatens them again.
The U.S. president for his part said he had secured total and permanent U.S. access to Greenland in a deal with NATO.
The details of any agreement remain unclear and Denmark insisted its sovereignty over the island isn't up for discussion.
Spot silver surged 2.8% to $98.87 an ounce, after hitting a record high of $99.34 earlier.
"The underlying story to silver is one about the outperformance of silver versus gold and its industrial applications," Rodda added.
Markets anticipate the Fed will deliver two quarter-percentage point rate cuts in the latter half of 2026, raising non-yielding gold's appeal. FEDWATCH
Spot platinum gained 0.8% to $2,650.90 per ounce after hitting a record $2,684.43 earlier, while palladium lost 0.6% to $1,908.02. (REUTERS) https://www.shafaq.com/en/Economy/Precious-metals-surge-to-records-as-investors-flee-US-assets
Oil Rebounds As Trump Renews Iran Threat
Economy & Business Oil 2026-01-23 Shafaq News Oil prices rebounded on Friday after U.S. President Donald Trump renewed threats against major Middle Eastern producer Iran, raising concerns of military action that could disrupt supplies.
Brent crude futures for March rose 35 cents, or 0.55%, to $64.41 a barrel. U.S. West Texas Intermediate crude rose 33 cents, or 0.56%, to $59.69 a barrel as of 0243 GMT.
Both contracts slumped about 2% on Thursday. They rebounded after Trump told reporters aboard Air Force One the U.S. has an "armada" heading toward Iran but hoped he would not have to use it, as he renewed warnings to Tehran against killing protesters or restarting its nuclear program.
Warships including an aircraft carrier and guided missile destroyers will arrive in the Middle East in the coming days, a U.S. official said. Iran is the fourth-largest producer in the Organization of the Petroleum Exporting Countries and a major exporter to China, the world's second-largest oil consumer.
Brent and WTI are set for weekly gains of about 0.6% after prices climbed earlier in the week on Trump's threats to invade Greenland, potentially destabilising the trans-Atlantic alliance, but dropped on Thursday as he pulled back on any military action.
Trump stepped back after saying Denmark, which controls the Arctic island, NATO and the U.S. had reached a deal that would allow "total access" to Greenland.
Prices also softened on Thursday following bearish government data showing stockpiles in the U.S., the world's biggest oil user, climbed last week amid slowing fuel demand.
U.S. Energy Information Administration data released on Thursday said crude inventories climbed by 3.6 million barrels for the week ending January 16, more than the 1.1-million-barrel rise predicted by analysts in a Reuters poll.
This also exceeded the 3-million-barrel build that market sources said the American Petroleum Institute (API) trade group reported on Wednesday.
Both U.S. agencies released their reports a day later than usual due to the U.S. Martin Luther King Jr. holiday on Monday. (Reuters) https://www.shafaq.com/en/Economy/Oil-rebounds-as-Trump-renews-Iran-threat
IRGC Says It Foiled Foreign-Backed Plot To Destabilize Iran
2026-01-23 Shafaq News- Tehran Iran’s Islamic Revolutionary Guard Corps (IRGC) Intelligence Organization said it thwarted “a coordinated foreign-backed plan aimed at fueling unrest and terrorist activity inside Iran,” according to a statement reported by Iranian media outlets.
In its third public statement on the issue, the IRGC intelligence arm said the alleged plot was organized following the 12-day war with Israel and involved the formation of an external command structure linking intelligence services from “10 hostile countries.” The organization said the plan sought to combine internal unrest, armed group activity, and external pressure to create a serious security threat to the country.
The Iranian security agencies, IRGC said, carried out a series of preventive intelligence operations between late June and early January, focusing on domestic unrest and armed group movements led to the arrest or summons of 735 individuals accused of links to “anti-security networks,” the guidance of around 11,000 people deemed vulnerable to involvement in unrest, and the seizure of 743 unlicensed weapons. It also claimed that 46 individuals connected to foreign intelligence services were identified and brought under control.
The IRGC alleged that the unrest involved multiple tactics, including the infiltration of violent actors into protest crowds, foreign political and security support for mobilization efforts, manipulation of social media platforms to incite violence, and the use of individuals with criminal backgrounds.
Since the cross-border war with Israel, Iran’s judiciary and intelligence agencies have reported a series of cases involving what they describe as espionage networks or cells linked to Israel’s Mossad, though authorities have released limited details. Officials have also said that at least ten people accused of spying for Mossad have been executed during this period. https://www.shafaq.com/en/Middle-East/IRGC-says-it-foiled-foreign-backed-plot-to-destabilize-Iran