The dollar index fell by -0.03% on Monday as optimism grew about the US government shutdown nearing an end. Senate Democrats broke ranks to advance a bill to reopen the government, potentially revealing a weakening economy and prompting more Fed rate cuts. Stocks strength also reduced the dollar’s demand.

St. Louis Fed President Alberto Musalem’s comments limited the dollar’s losses on Monday, predicting a US economic rebound next quarter with limited room for more rate cuts. Higher T-note yields supported the dollar’s interest rate differentials. San Francisco Fed President Mary Daly noted tariffs’ limited effects on inflation.

The Euro fell by -0.03% on Monday after Eurozone Nov Sentix investor confidence unexpectedly dropped. Central bank divergence favors the Euro, with the ECB done cutting rates while the Fed is expected to continue. The Eurozone investor confidence index fell to -7.4, below expectations.

USD/JPY rose by +0.39% on Monday as Japanese PM Takaichi hinted at a more expansionary fiscal policy. Higher T-note yields weighed on the yen, while the Japan Sep leading index CI rose more than expected. Political uncertainty and a delayed BOJ rate hike have weakened the yen recently.

December COMEX gold and silver closed higher on Monday, with gold at a 2-week high and silver at a 2.5-week high. Speculation about a weakening US economy due to the shutdown and Fed rate cuts boosted prices. Dollar weakness and Japanese fiscal policy changes also supported precious metals.

Precious metals maintain safe-haven demand amid the US government shutdown, US tariffs uncertainty, central bank buying, and Fed independence concerns. Long liquidation pressures have weighed on prices since mid-October, with gold and silver ETF holdings falling after reaching 3-year highs.

Read more at Yahoo Finance: Dollar Ends Slightly Lower as Stocks Rally on Government Reopening Plans