The dollar index rose by +0.32% to a 1.75-month high due to political uncertainty in France and Japan. The ongoing US government shutdown is bearish for the dollar. Markets predict a 93% chance of a -25 bp rate cut at the next FOMC meeting.

EUR/USD fell by -0.29% to a 6-week low on weaker Eurozone economic news and political turmoil in France. German industrial production posted its biggest decline in nearly 3.5 years. ECB sees the Eurozone economy slowly picking up.

USD/JPY rose by +0.55%, hitting a 7.75-month low against the dollar. Weak wage growth in Japan and higher T-note yields pressured the yen. Concerns over Japan’s new Prime Minister and BOJ policy tempered expectations for rate hikes.

Precious metal prices surged on Wednesday, with gold hitting new contract highs. Safe-haven demand rose due to the US government shutdown and political turmoil in France. Central bank gold buying, weaker US economic news, and fund buying of precious metal ETFs are supporting prices.

Read more at Yahoo Finance: Dollar Gains as the Euro and Yen Retreat