The dollar index (DXY00) rose by +0.06% Wednesday, gaining support from hawkish comments by Atlanta Fed President Bostic favoring steady interest rates. The yen’s fall to a 9.25-month low against the dollar also boosted the greenback. However, dollar gains were limited due to stock strength reducing liquidity demand.

The dollar is pressured as the US government shutdown resolution nears, with the Senate passing a temporary funding bill. The House is expected to vote on it Wednesday. Economic reports’ release may reveal a weakening US economy, influencing the Fed to continue cutting interest rates.

EUR/USD (^EURUSD) rose by +0.06% Wednesday, bouncing back due to ECB Executive Board member Schnabel’s positive comments on interest rates. Central bank divergence benefits the euro, with the ECB done with rate cuts while the Fed is expected to cut rates more.

USD/JPY (^USDJPY) rose by +0.36% Wednesday as the yen hit a 9.25-month low against the dollar. Japanese political uncertainty and a delayed BOJ rate hike have weakened the yen. The possibility of a BOJ rate hike at the December 19 meeting stands at 41%.

December COMEX gold (GCZ25) closed up +97.30 (+2.36%) Wednesday, reaching a 3-week high. Precious metals surged on speculation of a weakening US economy prompting Fed rate cuts. Safe-haven demand increased due to concerns over Japan’s fiscal policy. Central bank buying also supports prices.

Strong central bank demand for gold, as seen in China’s PBOC and global central bank purchases, uplifts prices. However, long liquidation pressures since mid-October have weighed on precious metals. Holdings in gold and silver ETFs fell after reaching 3-year highs on October 21.

Read more at Yahoo Finance: Dollar Slightly Higher as US Government Shutdown End Nears