The dollar index hit a 2.75-month high, up +0.29% on Thursday, supported by higher T-note yields and hawkish comments from Fed Chair Powell. US-China trade tensions easing is a positive for economic growth. The ongoing US government shutdown pressures the dollar and could lead to Fed rate cuts.

Markets expect a 72% chance of a 25 bp rate cut by the FOMC in December. EUR/USD fell to a 2-week low on Thursday, impacted by a strong dollar. Eurozone Q3 GDP and German Oct CPI data beat expectations, supporting the euro. ECB President Lagarde’s comments were bullish for the euro.

BOJ kept interest rates unchanged, causing USD/JPY to rise +0.87%. BOJ Governor Ueda emphasized the need for more data before making a rate decision. BOJ raised Japan GDP forecast to +0.7% for 2025. Precious metals prices rose as central banks increased gold purchases and economic strength boosted industrial metals demand.

Stronger dollar and higher bond yields initially pushed precious metals lower. Safe-haven support remains due to the US government shutdown and geopolitical risks. Long liquidation pressures and S&P 500 rally have weighed on precious metals prices. ETF outflows have been observed in gold and silver holdings.

Read more at Yahoo Finance: Dollar Pushes Higher on Reduced Fed Rate Cut Speculation