The dollar index rose by +0.12% on Tuesday due to liquidity demand and S&P Global Ratings affirming US debt ratings. Lower T-note yields, progress in Ukraine peace talks, and housing data impacted the dollar. President Trump’s security commitments in Ukraine and potential peace summit could affect tariffs and oil prices.

Markets recalibrate after last week’s PPI report, reducing hopes for a Fed rate cut in September. Federal funds futures show an 87% chance of a -25 bp rate cut at the September FOMC meeting and 54% for a second cut in October.

EUR/USD fell by -0.15% as the euro reversed gains against the dollar. Swaps price in a 7% chance of a -25 bp rate cut by the ECB. USD/JPY fell by -0.28% due to Japanese bond yields and US tariff concerns impacting the yen.

Gold and silver prices dropped on Tuesday due to dollar strength and reduced safe-haven demand from peace talks over Ukraine. Silver also faced demand concerns from weak building permits data. Precious metals are supported by lower T-note yields and safe-haven demand related to geopolitical risks.

Lower T-note yields supported precious metals on Tuesday. Gold and silver continue to have safe-haven demand amid geopolitical risks. Fund buying boosted prices, with gold holdings in ETFs at a 2-year high and silver holdings at a 3-year high.

Read more at Yahoo Finance: Dollar Recovers as Stocks Falter