The dollar index is up by +0.16% today, boosted by higher T-note yields and a shrinking US trade deficit to a 1.75-year low. However, the dollar fell after the Jul ISM services index declined, and dovish comments raised expectations of Fed rate cuts.

Questions about the Fed’s credibility, stock strength, and the resignation of Fed Governor Adriana Kugler are weighing on the dollar. Federal funds futures are pricing in a 92% chance of a -25 bp rate cut in September.

EUR/USD is down by -0.27% due to a stronger dollar and downward revisions to Eurozone PMI data. Swaps are pricing in a 13% chance of an ECB rate cut in September. Concerns about Trump’s tariff policies are also pressuring the euro.

USD/JPY is up by +0.37% as the yen weakens against the dollar. Minutes from the BOJ meeting showed concerns about ending QE too quickly, and lower JGB yields are impacting the yen. T-note yields are also weighing on the yen.

Gold and silver prices are up due to dovish Fed comments, demand as an inflation hedge, and geopolitical risks. Precious metals also have safe-haven support amid concerns about global economic growth. However, a stronger dollar and higher T-note yields are limiting gains.

Read more at Yahoo Finance: Dollar Recovers with Bond Yields