The dollar index fell by -0.69% to a 2.5-month low on expectations of a -25 bp rate cut by the Fed. Retail sales rose more than expected, while manufacturing production increased. Concerns over Fed independence and personnel changes also weighed on the dollar.

EUR/USD rose by +0.88% to a 4-year high, benefiting from dollar weakness. Eurozone economic news was mixed, with industrial production below expectations but labor costs and German economic growth expectations rising. The ECB is seen nearing the end of its rate-cutting cycle, supporting the euro.

USD/JPY fell by -0.69% as the yen rallied to a 3.5-week high against the dollar. The yen was boosted by positive Japanese economic news and political developments, as well as lower T-note yields. Gold and silver prices settled mixed, with metals seeing support from a weaker dollar and expectations of Fed rate cuts.

Gold prices continue to find support from geopolitical uncertainties and demand for safe-haven assets amid political changes in France and Japan. Precious metals prices are also bolstered by fund buying of ETFs, with gold holdings at a 2.25-year high and silver holdings at a 3-year high.

Read more at Yahoo Finance: Dollar Slumps on Fed Easing Prospects