The Dollar Index (DXY) fell 0.20% on Wednesday, reaching a one-week low due to a sustained ceasefire between Israel and Iran and weaker-than-expected U.S. new home sales, which dropped 13.7% month-over-month to 623,000 against forecasts of a 6.7% decline. Additionally, markets are pricing in a 25% chance of a 25 basis point rate cut after the July 29-30 Federal Open Market Committee (FOMC) meeting.
In contrast, the euro rose 0.47% to a 3.5-year high, supported by a 1.6% year-over-year increase in Eurozone new car registrations in May, the largest rise in five months. Japanese yen saw a slight rise of 0.15%, though recent lower U.S. Treasury yields and news of Japan’s May Producer Price Index (PPI) services prices increasing by 3.3% year-over-year helped support the currency.
Precious metals witnessed gains as gold closed up 0.28% and silver gained 1.06%, attributed to the declining dollar and ongoing tariff concerns. However, demand was limited due to the ceasefire between Israel and Iran and hawkish comments from central bank officials, including Fed Chair Powell and Kansas City Fed President Schmid.
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