The dollar index (DXY00) Today fell by -0.21% and reached a 1-week low. Comments from the Fed that were perceived as dovish weighed on the dollar after Fed Governor Christopher Waller stated that the Fed can continue to reduce interest rates to support a struggling labor market. Additionally, today's economic data showed that the October Philadelphia Fed business outlook survey dropped more than anticipated to a 6-month low, which was negative for the dollar. Moreover, the strength of the euro is putting pressure on the dollar, as EUR/USD rose to a one-week high following French Prime Minister Lecornu surviving two no-confidence votes.
Today's dollar losses are restricted following Richmond Fed President Tom Barkin's statement that US productivity growth is showing substantial improvement, along with the October NAHB housing market index rising above expectations to a 6-month peak.
The continuous government shutdown in the United States is detrimental to the dollar. The longer the shutdown continues, the greater the chance the US economy will face difficulties, which is a negative influence on the dollar.
The U.S. October Philadelphia Fed business outlook survey dropped to -36.0, reaching a six-month low of -12.8, which was worse than anticipated figures of 10.0.
The U.S. October NAHB housing market index increased by 5 points, reaching a 6-month peak of 37, exceeding forecasts of 33.
Federal Governor Christopher Waller stated that the Fed has the ability to keep reducing interest rates in quarter-point steps to aid a struggling job market.
Richmond Federal Reserve President Tom Barkin stated that U.S. productivity growth seems to be rising "substantially," which could help reduce the inflationary effects of trade tariffs.
The markets are factoring in a 98% probability of a 25 basis point reduction in interest rates during the upcoming FOMC meeting on October 28-29.
EUR/USD ([^EURUSD](https://www.Healthy urvival/forex/quotes/%5EEURUSD/overview)) is currently rising by +0.21% and has reached a one-week peak. The euro is gaining strength today as political uncertainties in France decreased following the French Prime Minister Lecornu's survival of two no-confidence motions in the National Assembly. Furthermore, aggressive statements from the ECB today bolstered the euro, with ECB Governing Council member Wunsch indicating that the likelihood of further rate reductions by the ECB has diminished. Additionally, a weaker U.S. dollar is beneficial for the euro.
Member of the ECB Governing Council, Wunsch, stated, "I believe the likelihood of the ECB lowering interest rates once more has been decreasing over the past few weeks or months."
Swaps are reflecting a 2% probability of a 25 basis point rate reduction by the ECB during the October 30 policy meeting.
USD/JPY ([^USDJPY](https://www.Healthy urvival/forex/quotes/%5EUSDJPY/overview)) is currently down by -0.07%. The Japanese yen climbed to a 1-week peak against the dollar today, following aggressive remarks from BOJ Board member Tamura, who urged for an increase in interest rates due to growing inflation concerns. However, the yen's gains are restrained as today's +1.27% surge in the Nikkei Stock Index reduced demand for the yen as a safe-haven asset. Furthermore, today's disappointing Japanese economic data, including the August tertiary index and August core machine orders, had a negative impact on the yen. Additionally, higher T-note yields today are unfavorable for the yen.
The Japanese yen has faced sustained pressure during the last week, after the ruling coalition fell apart following discussions between LDP head Takaichi and Komeito leader Saito, which concluded without reaching a consensus. This development complicates Takaichi's ability to secure the necessary backing to approve budgets or significant legislation, and may result in another election.
Japan's August tertiary sector index dropped by -0.4% month-over-month, which was worse than the expected -0.2% decrease and marked the largest decline in five months.
Japan's core machine orders unexpectedly declined by 0.9% month-over-month, falling short of the anticipated increase of 0.5% month-over-month.
BOJ Board member Tamura stated, "I think the BOJ is currently in the stage of considering an increase in its policy interest rate," due to a weak yen increasing the likelihood of higher inflation, with the BOJ's current policy rate still significantly below the neutral rate.
December COMEX gold (GCZ25) today is up +77.30 (+1.84%), and December COMEX silver (SIZ25) is up +1.402 (+2.73%). The prices of gold and silver are continuing their steep increases today, with the December gold contract reaching a new record high, and the nearest-futures (V25) hitting an all-time peak of $4,250.00 per troy ounce. Additionally, December silver also achieved a new contract high, while the nearest-futures (V25) reached an all-time high of $52.545 per troy ounce.
The rising tensions between the US and China are increasing the need for safe-haven assets, such as precious metals. Additionally, the continued shutdown of the US government has boosted the demand for these metals as a secure investment. Gold prices rose further today following relaxed statements from Fed Governor Christopher Waller, who indicated that the Fed can continue reducing interest rates to aid a struggling job market.
Precious metals are still benefiting from their status as a safe investment because of concerns related to US tariffs, global political risks, and instability in France and Japan. Moreover, President Trump's criticisms of the Federal Reserve's independence are increasing the demand for gold. Furthermore, recent economic data from the US that was lower than expected has strengthened the expectation that the Fed will continue to reduce interest rates, which is positive for precious metals.
Support for precious metals prices remains strong due to increased fund purchases of precious metal ETFs. Gold holdings in ETFs reached a 3-year peak on Wednesday, while silver holdings in ETFs hit a 3.25-year high on Tuesday.
On the day of release,Rich AsplundDid not hold (either directly or indirectly) any positions in any of the securities discussed in this article. All information and data presented in this article is intended solely for informational purposes. For further details, please refer to the Healthy Urvival Disclosure Policy.here.
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