EURUSD & GOLD

1. bring capital back into the United States
2. close foreign positions

To do this, they buy USD, which leads to:
higher demand → a stronger dollar

This is a classic January seasonal effect.

Large portfolio rebalancing

Large funds (pension funds, asset managers):

1. rebalance allocations after the previous year’s performance
2. after a strong year in equities or crypto, shift part of their capital into:
   1. cash
   2. USD-denominated bonds

This creates additional inflows into the dollar.

Carry trade unwinding

Many investors:

1. borrow in low-interest currencies (JPY, CHF)
2. invest in higher-risk assets

At the beginning of the year, they:

1. reduce risk exposure
2. unwind these positions

The result is USD buying.

Defensive positioning / risk-off
January is typically a period of caution:

1. investors wait for key economic data
2. risk appetite is reduced

USD is considered a safe-haven currency, so:
when markets turn cautious, the USD strengthens.

Fed policy expectations

At the start of the year, markets:

1. recalibrate expectations around interest rates

If:

1. the U.S. economy appears more resilient
2. rate cuts are delayed

the USD can strengthen temporarily.

Short conclusion

The USD tends to rise at the beginning of the year mainly due to:

1. seasonal factors
2. capital flows
3. portfolio rebalancing and increased caution

In many cases, this strength:

1. is temporary
2. fades toward February–March, depending on macro data.

+International situation: Venezuela