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On Wednesday, the dollar index (DXY) rose by +0.65%, reaching a 1.5-week high, driven by Federal Reserve Chair Jerome Powell’s lack of hints on potential rate cuts and hawkish comments from Chicago Fed President Austan Goolsbee. Simultaneously, U.S. new home sales in August surged by +20.5% month-over-month to 800,000, significantly exceeding expectations of a decline to 650,000.
In related news, the German September IFO business climate survey fell unexpectedly to a 4-month low of 87.7, contrary to forecasts of an increase to 89.4. Meanwhile, Japan’s September S&P manufacturing PMI dropped to a 6-month low of 48.4, signalling weakness in manufacturing activity, while Japan’s Ministry of Finance announced a ¥100 billion ($675 million) reduction in long-term government debt issuance.
Precious metals prices declined on Wednesday, with December gold closing down -1.25% and December silver down -0.93%, as the dollar strengthened and T-note yields rose. Despite this, gold ETF holdings reached a nearly 3-year high, highlighting ongoing safe-haven demand amid geopolitical uncertainties.
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