The dollar index fell by -0.12% on Friday due to the ongoing US government shutdown, entering its third day. The longer the shutdown persists, the more the US economy may suffer, affecting GDP growth. The dollar also extended losses as the Sep ISM services index dropped to a 4-month low, but recovered slightly after hawkish comments from Fed officials.

US Sep S&P composite PMI was revised upward to 53.9 from 53.6. However, the Sep ISM services index fell to a 4-month low of 50.0, below expectations. The Sep ISM services price paid sub-index unexpectedly rose to 69.4.

Chicago Fed President and Dallas Fed President cautioned against further rate cuts, citing inflation concerns. Markets are pricing in a 97% chance of a -25 bp rate cut at the next FOMC meeting.

EUR/USD rose by +0.22% on Friday, supported by a weaker dollar and hawkish comments from an ECB official. However, Eurozone Sep producer prices declined more than expected.

Eurozone Sep PPI fell more than expected. ECB Governing Council member stated that current ECB policy settings are appropriate for inflation targets. Swaps show a 1% chance of a rate cut at the October ECB meeting.

USD/JPY rose by +0.15% on Friday, pressured by Japan’s rising jobless rate and dovish comments from BOJ Governor. Yen losses were limited by higher JGB yields.

Japan’s Aug jobless rate rose to a 13-month high of 2.6%. The Japan Sep S&P composite PMI was revised upward to 51.3.

Precious metal prices rallied on Friday, with gold and silver closing higher. Weaker dollar, US government shutdown, and demand for safe-haven assets fueled the surge.

Nearest-futures gold prices hit a record high. Precious metals receive support from fund buying of ETFs. Swaps show a 97% chance of a Fed rate cut at the October meeting.

Read more at Yahoo Finance: Dollar Falls as US Government Remains Shutdown