The dollar index (DXY) fell to a 3.5-week low on Wednesday, closing down 0.46%, as U.S. June producer prices rose less than anticipated, impacting Federal Reserve policy expectations. The likelihood of a Fed rate hike at the upcoming FOMC meeting on July 28-29 dropped to 10% from 43% earlier in the week. Meanwhile, airstrikes by U.S. forces against Iran for the fifth consecutive day contributed to rising crude oil prices, which may increase inflation expectations.
U.S. June PPI final demand increased by 5.5% year-over-year, below the forecast of 6.2%. Additionally, the July Empire manufacturing survey reported a rise of 9.9 to 15.6, exceeding the expected 9.2. In Japan, the May tertiary industry index rose 1.1% month-over-month, beating predictions of 0.4%, while core machine orders fell by 12.4% month-over-month—the largest drop in nearly 6.5 years.
Gold prices closed down 0.44%, influenced by higher crude prices and a weakened dollar, while silver prices fell 2.83%. Notably, long holdings in gold ETFs dropped to a 9.5-month low, whereas reserves for China’s central bank increased by 480,000 ounces, marking the twentieth consecutive month of growth.
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