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The dollar index (DXY) fell by 0.22% on Monday as weak U.S. labor market data and a potential government shutdown weigh on market sentiment. Speculation suggests the Fed may continue to cut interest rates amid forecasts for upcoming employment reports, with an 89% chance of a 25 basis point cut at the next FOMC meeting on October 28-29. Additionally, August pending home sales rose by 4.0% month-over-month, exceeding expectations of 0.4% and marking the largest increase in five months.
The Eurozone’s economic confidence index increased by 0.2 to 95.5 in September, surpassing estimates of 95.3. This, along with comments from ECB officials indicating an end to rate cuts, supported the euro, which appreciated by 0.23% against the dollar. In Japan, the July leading index was revised upward to a four-month high of 106.1, contributing to a 0.60% decline in USD/JPY, bolstered by hawkish remarks from a BOJ board member.
Precious metals gained traction on Monday, with December gold climbing by $46.20 to a contract high of $3,827.60 per ounce, and December silver rising by $0.360. The demand for safe-haven assets continues amid geopolitical risks, uncertainty surrounding U.S. tariffs, and expectations of further interest rate cuts. Fund purchases have also increased gold and silver holdings in ETFs to near three-year highs.
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