The dollar index hit a 2.75-month low but later recovered, trading flat. Despite strong US GDP data, odds for a Fed rate cut are reduced. Initial US jobless claims dropped to 214,000, beating expectations. Continuing claims rose slightly. China’s central bank remains cautious, focusing on stability and avoiding sudden interest rate cuts.

Expectations of future interest rate moves weigh on the dollar. The Fed is expected to cut rates, while the BOJ may raise them, and the ECB might maintain the status quo. Market concerns include increased liquidity and fears of a dovish Fed Chair appointment by President Trump.

EUR/USD is down slightly, supported by ECB comments signaling no interest rate cuts. ECB members express satisfaction with current policy but remain open to adjustments based on economic conditions. Swaps predict a low chance of a rate hike at the next ECB meeting. USD/JPY declines, supported by recent BOJ rate hike and Japan’s stance on currency intervention.

Gold and silver prices fall after reaching new highs due to long liquidation. Precious metals face pressure from a stronger US GDP report reducing Fed rate cut expectations. Geopolitical risks and central bank demand support prices. Fund demand for precious metals remains strong, with increased holdings in ETFs.

Read more at Yahoo Finance: Dollar Index Posts 2.75-Month Low But Then Recovers