The dollar index rose by +0.39% as French Prime Minister Lecornu resigned, weakening the euro. Sanae Takaichi’s election as Japan’s new prime minister also boosted the dollar. Higher T-note yields supported the dollar’s interest rate differentials. The ongoing US government shutdown affects the dollar negatively, with concerns about economic growth and GDP stagnation.

Markets predict a 95% chance of a -25 bp rate cut at the next FOMC meeting. EUR/USD fell by -0.26% due to political turmoil in France and uncertainty about the Eurozone’s economy. The Eurozone’s Oct Sentix investor confidence index exceeded expectations, and ECB President Lagarde anticipates economic improvement in 2026.

USD/JPY surged by +1.89% as Sanae Takaichi’s election as Japan’s likely new prime minister weakened the yen. Her pro-stimulus stance and higher T-note yields weighed on the yen. Gold and silver prices rose sharply on Monday, driven by the US government shutdown, political turmoil in France, and safe-haven demand amid global uncertainties.

Precious metals continue to benefit from safe-haven demand amid US tariffs, geopolitical risks, and trade tensions. President Trump’s attacks on Fed independence and uncertainties regarding Fed Governor appointments also support precious metal prices. Weaker US economic data strengthens the case for further Fed interest rate cuts, positively impacting precious metals.

Read more at Yahoo Finance: Dollar Firms as the Euro and Yen Decline