The dollar index fell by -0.12% today due to expectations of easier Fed policy and the potential for another 50 bp rate cut this year. St. Louis Fed President and Atlanta Fed President both see limited room for further rate cuts. The US Aug Chicago Fed national activity index rose to a 5-month high of -0.12.

EUR/USD is up by +0.19% today, supported by the weaker dollar and Fitch Ratings’ upgrade of Italy’s sovereign credit rating. Eurozone Sep consumer confidence rose stronger than expected. The euro is further supported by central bank divergence between the ECB and Fed.

USD/JPY is down by -0.03% as the yen strengthened due to a weaker dollar and higher Japanese government bond yields. T-note yields are limiting gains in the yen. Precious metals prices surged today, with gold reaching a contract high and silver climbing to a 14-year high. The weaker dollar, Fed rate cut prospects, and safe-haven demand are driving the rally.

Gold and silver prices are also supported by fund buying of precious metal ETFs. However, prices retreated slightly today as T-note yields rose on hawkish comments from Fed officials. Geopolitical risks, trade tensions, and uncertainty surrounding Fed independence and appointments continue to boost demand for precious metals.

Read more at Yahoo Finance: Dollar Slips and Gold Posts a Record High on Fed Rate-Cut Prospects