The dollar index (DXY00) rebounded on Thursday by +0.11% after Hawkish Fed comments prompted short covering. The US government shutdown initially caused the dollar to dip, as did weak labor market signs and job cuts. Dallas Fed President and Chicago Fed President expressed caution about further rate cuts. Challenger job cuts fell 25.8% y/y, reflecting a challenging labor market. Markets anticipate a -25 bp rate cut at the next FOMC meeting.

EUR/USD (^EURUSD) fell by -0.06% on Thursday due to the dollar’s rebound, Eurozone’s rising unemployment rate, and dovish ECB policy outlook. ECB Governing Council member Kazaks supported current interest rates. The euro benefits from ECB’s rate stance compared to the Fed’s expected rate cuts. Eurozone Aug unemployment rate unexpectedly rose by +0.1 to 6.3%.

USD/JPY (^USDJPY) rose by +0.06% on Thursday, driven by a weaker yen as the dollar strengthened. Japan’s consumer confidence index increased, and BOJ Deputy Governor Uchida’s hawkish comments supported the yen. Precious metal prices dropped as the dollar rebounded and central banks made hawkish statements. Gold and silver retreated due to these factors.

Precious metals experienced a decline on Thursday, with gold and silver prices falling after the dollar rebounded. Gold reached a record high on Wednesday amidst the US government shutdown and expectations of a Fed rate cut. Geopolitical risks and trade uncertainties, along with Trump’s Fed-related actions, continue to support precious metal demand.

Fund buying of precious metal ETFs has boosted gold and silver holdings to 3-year highs. Safe-haven demand for precious metals remains strong due to various uncertainties and risks in the global economy. President Trump’s interference with the Fed and the appointment of Fed Governor Cook contribute to market uncertainty.

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