Institution: Extreme Position Closing Triggered by the Nomination of the Chairman of the Federal Reserve

Analysts at Malaya Bank said that the nomination of Kevin Warsh by US President Trump as Chairman of the Federal Reserve provided a trigger for the extreme unwinding of positions in the market. In a report, these analysts wrote: "The nomination news alleviated concerns in the market that Trump's nominee might be a yes-man, who would excessively lower policy rates at the expense of rising inflation risks." Warsh has been critical of the Federal Reserve in the past, believing that the Federal Reserve should only be responsible for stabilizing prices. His unexpected nomination prompted market participants to abandon the idea of a depreciating dollar, leading to a sharp decline in the prices of gold, silver, and copper after significant increases in January. The DXY dollar index has stabilized, but Malaya Bank suggests that the price trend indicates that a more severe reversal still seems unlikely, with resistance at 97.50.