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The dollar index (DXY00) rose by +0.09% on Friday, recovering from a 1.5-week low as concerns eased over the credit quality of US regional banks. The recovery was spurred by President Trump’s comments about unsustainable tariffs on Chinese goods. This helped strengthen interest rate differentials, with a 100% probability of a -25 basis point rate cut at the next FOMC meeting on October 28-29.
The euro fell by -0.15% after reaching a 1.5-week high, influenced by dovish comments from ECB Governing Council member Simkus, who highlighted the need for potential interest rate cuts. The Eurozone’s September core CPI was revised upward to 2.4% year-on-year. Meanwhile, the yen rose by +0.04% despite ongoing political instability in Japan, reflecting reduced safe-haven demand as US-China trade tensions eased.
In commodities, December COMEX gold declined by -2.12% and silver by -5.99% due to lowered safe-haven demand following the easing of banking credit quality concerns, alongside strengthening of the dollar. Gold ETF holdings reached a 3-year high, contributing to ongoing demand for precious metals amid geopolitical uncertainties.
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