The dollar index climbed to a 1.5-week high on hawkish comments from Kansas City Fed President Jeff Schmid, pushing EUR/USD down. The ongoing US government shutdown is bearish for the dollar, with a 93% chance of a -25 bp rate cut at the next FOMC meeting.

Political turmoil in France and Japan is boosting the dollar, while the euro and yen are sliding. German August factory orders fell unexpectedly, and swaps show a 1% chance of a rate cut by the ECB. USD/JPY is up on concerns about Japan’s policy tightening under the new Prime Minister.

Precious metal prices are mixed as gold hits new highs, supported by the US government shutdown and political turmoil in France and Japan. Safe-haven demand is driving prices higher, along with central bank buying. The rally in the dollar index and hawkish Fed comments are bearish for precious metals.

Demand for precious metals continues amid uncertainty from US tariffs, geopolitical risks, and global trade tensions. Recent weak US economic data supports the outlook for the Fed to cut interest rates, a bullish factor for precious metals. Fund buying of precious metal ETFs is also supporting prices.

Read more at Yahoo Finance: Dollar Climbs on Hawkish Fed Comments