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On Monday, the dollar index (DXY) fell by 0.32%, reaching a new 1.5-month low, influenced by a weak U.S. unemployment report and rising expectations for Federal Reserve rate cuts. Markets are currently pricing a 15% chance of a 50 basis point rate cut during the upcoming FOMC meeting on September 16-17, with an 81% chance of an additional 25 basis point cut in October, projecting an overall reduction of 75 basis points by year-end.
In the Eurozone, the euro rose by 0.40% to a 1.5-month high, buoyed by a weaker dollar, despite mixed economic news. The September Sentix investor confidence index unexpectedly fell to a 5-month low of -9.2. Conversely, German industrial production increased by 1.3% in July, exceeding expectations.
In Japan, the Q2 GDP was revised upwards to 2.2% from 1.0%. Political uncertainty increased with Prime Minister Ishiba announcing his resignation, which may influence fiscal policy. Precious metals were supported by the weaker dollar, with December gold closing up $24.10 (0.66%) and achieving a contract high. China’s central bank increased gold purchases by 0.06 million troy ounces in August, totaling 74.02 million troy ounces.
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