The dollar index rose by +0.88% to a 2-month high after strong US economic data and hawkish comments from Fed Chair Powell. Fed funds futures show a 49% chance of a rate cut in September. President Trump announced a 25% tariff on India. Precious metals fell due to dollar strength and hawkish Fed policy.

US economic data was positive, with July ADP employment change beating expectations and Q2 GDP growing more than expected. Fed downgraded economic view but maintained rates. Concerns about tariffs affecting growth persist. Eurozone economic news was better than expected, supporting the euro. EUR/USD fell due to dollar strength and EU-US trade deal.

USD/JPY rose by +0.61% after US economic news pushed the dollar higher. Yen initially rose on an earthquake off Russia’s coast but fell due to concerns about Japan’s fiscal deterioration. Losses in yen accelerated after T-note yields rose. Gold and silver prices dropped on dollar strength, higher T-note yields, and hawkish Fed comments.

In after-hours trading, precious metals prices sank further due to Powell’s comments on tariffs. Safe-haven demand supported metals amid concerns about global growth and geopolitical risks. Trump’s announcement of tariffs on India and potential penalties added to the uncertainty. Metals prices continue to be influenced by economic data and Fed policy.

Read more at Yahoo Finance: Dollar Rallies and Gold Sinks as Powell Pushes Back Against Rate Cuts