The U.S. dollar index (DXY) rose by 0.11% on Friday, amid weakening in the yen following the Bank of Japan’s (BOJ) decision to keep interest rates unchanged. This was influenced by a 3.0% year-on-year increase in Japan’s August national Consumer Price Index (CPI), the highest in 10 months. Fed Governor Christopher Waller supported a 50 basis point rate cut this week due to softer inflation, with the market pricing a 100% chance of a 25 basis point cut at the upcoming FOMC meeting on November 6-7.
In Europe, the Eurozone consumer confidence index increased by 0.5 points to -12.9 in September, exceeding expectations. The euro fluctuated due to dovish comments from an ECB official regarding easing monetary policy. Swaps indicate a 26% chance of a 25 basis point cut by the ECB at the October 17 meeting, and a 100% likelihood by December 12.
Gold prices surged, with December futures closing up $31.60, marking an all-time high of $2,621.80 an ounce as market expectations for further Fed rate cuts supported precious metals. However, the dollar’s strength and rising global bond yields exerted downward pressure on metal prices later in the day.
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