The dollar index (DXY00) fell by -0.38% on Monday, continuing losses from last Friday, influenced by disappointing U.S. payroll and manufacturing reports. Speculation regarding a potential 25 basis point rate cut by the Federal Reserve as early as next month has increased, with futures pricing in a 90% chance for the September 16-17 FOMC meeting. Additionally, the resignation of Fed Governor Adriana Kugler raised questions about the Fed’s credibility, potentially affecting the appointment of a more dovish successor by President Trump.
In related economic data, U.S. June factory orders dropped by -4.8%, the largest decline in over five years, while excluding transportation, orders rose by +0.4%, outperforming expectations. The Eurozone also saw a decrease in the August Sentix investor confidence index, falling to -3.7 from expectations of 6.9. The euro declined by -0.15% amid concerns over economic growth due to tariff policies.
The USD/JPY pair decreased by -0.31%, with the yen rising as the Nikkei index fell, increasing safe-haven buying. Precious metals gained, with December gold up +0.78% and September silver up +1.08%, driven by a weaker dollar, lower bond yields, and rising geopolitical tensions.
