The dollar index rallied to a 3-week high but ended down -0.21% after President Trump hinted at firing Fed Chair Powell. Soft PPI data and a decline in the 10-year T-note yield also affected the dollar. June PPI reports were favorable, sparking inflation optimism. US industrial production and manufacturing production exceeded expectations.

The July New York Fed services business activity index improved. The Fed’s Beige Book noted a slight increase in economic activity but highlighted ongoing caution by businesses. All districts reported price increases due to tariffs. Expectations for Fed policy remain little changed, with futures pricing in a -25 bp rate cut.

EUR/USD rose +0.21% due to dollar weakness and a positive Eurozone trade surplus report. Swaps are pricing in a 1% chance of an ECB rate cut. USD/JPY fell by -0.60% on speculation of Japanese investors repatriating capital. The yen faces pressure ahead of the upcoming upper house election in Japan.

Gold and silver prices rose, supported by a lower dollar, declining T-note yield, and safe-haven demand. Bullish factors included President Trump’s comments on Fed Chair Powell. Rich Asplund did not hold positions in mentioned securities. The article provides informational purposes only.

Read more at Yahoo Finance: Dollar Falls Back on Apparent Trial Balloon for Firing Fed Chair Powell