The dollar index fell by -0.21% on Tuesday due to strength in the Chinese yuan. Losses accelerated as T-note yields rose, erasing early gains. Richmond Fed President Barkin’s slightly hawkish comments supported the dollar. The partial US government shutdown negatively impacted the dollar, but a deal is expected to avert a prolonged shutdown.

EUR/USD rose by +0.20% on Tuesday despite French CPI coming in weaker than expected. Swaps are discounting a 1% chance of a +25 bp rate hike by the ECB. USD/JPY rose by +0.10%, reaching a 1-week low against the dollar. A Kyodo News poll showed fiscal concerns in Japan ahead of the lower house election.

Gold and silver prices surged on Tuesday, recovering from recent declines. Precious metals are supported by safe-haven demand amid geopolitical risks and dollar debasement. The partial US government shutdown also boosts demand for precious metals. Central bank demand for gold remains strong, with China’s PBOC increasing its gold reserves.

Read more at Yahoo Finance: Dollar Retreats and Precious Metals Rally