US Dollar Advances as Maduro Ouster Fuels Rising Geopolitical Risks

The U.S. Dollar (USD) climbed to its strongest level in two weeks as geopolitical risks intensified following the U.S. capture of Venezuelan President Nicolás Maduro. Traders are shifting toward the greenback as uncertainty over Venezuela's future fuels safe-haven demand. The Bloomberg Dollar Spot Index rose as much as 0.3% to reach the highest level since December 22.

Benchmark U.S. Treasury yields slipped one basis point, while the euro dropped 0.3% and the Mexican peso slid 0.7%. Gold also surged, with the precious metal hitting $4,370 per ounce amid heightened geopolitical tensions. Gold is often viewed as a safe-haven asset during periods of global uncertainty.

President Donald Trump stated the U.S. will "run" Venezuela until a safe and orderly transition occurs, a declaration that has raised concerns about prolonged U.S. involvement in the region. Analysts suggest that the market is still processing the immediate geopolitical implications of the U.S. operation.

Why Did This Happen?

The U.S. move against Maduro came as part of a broader strategy to exert control over Venezuela's oil sector, which is vital to the global energy market. U.S. Secretary of State Marco Rubio said the U.S. will use leverage over oil to drive further change in the country. The U.S. has not directly intervened in Latin America since the Panama invasion in 1989. This action, therefore, signals a shift in U.S. foreign policy and raises questions about the potential for similar moves in the region.

How Did Markets React?

Markets were closed during the operation, but trading resumed with a strong start to 2026. Wall Street indexes closed in the green on January 3, while the U.S. Dollar advanced against major currencies. This follows a year dominated by tariff wars, central bank policy, and simmering geopolitical tensions. Gold prices climbed to a record high in 2025, and the precious metal continued its upward trend as U.S.-Venezuela tensions rose. Traders are watching closely for developments in both geopolitical and economic markets, especially as new data on U.S. employment and manufacturing will be released in the coming days.

What Are Analysts Watching Next?

Analysts suggest that the focus will shift to U.S. economic data as the immediate crisis in Venezuela stabilizes. Christopher Wong, an analyst at Oversea-Chinese Banking Corp., noted that while the U.S. Dollar has benefited from the geopolitical developments, economic reports will play a key role in shaping the greenback's trajectory. Investors are also watching for any potential U.S. military involvement in Venezuela. While Trump emphasized that the U.S. would take control of the country until a transition occurs, the lack of detailed planning has raised concerns among some lawmakers and foreign policy experts. The U.S. plans to hold Maduro accountable for charges including drug trafficking and election fraud. However, the international community has not yet responded to the U.S. action, and some countries have expressed concerns over the legality of the move.

As the situation evolves, investors are advised to monitor both geopolitical and economic developments. The U.S. Dollar is likely to remain under pressure from geopolitical factors in the near term, but market fundamentals will play a key role in the longer-term outlook.