The U.S. dollar index (DXY) fell by 0.55% today, as June consumer prices rose 3.5% year-over-year, lower than the expected 3.8%. This shift has reduced the probability of a Federal Reserve rate hike later this month to 12%, down from 43% earlier in the week.
In related developments, Fed Chair Warsh noted the resilience of the U.S. economy and stable labor market, while tensions in the Middle East have increased safe-haven demand for the dollar amid U.S. military actions against Iran. Crude oil prices surged by 3% to a one-month high, raising inflation expectations that could influence future Fed policy.
Meanwhile, gold prices rose 1.87% to $75.00 per ounce, driven by the dollar’s decline and reduced chances of a Fed rate hike. However, fund liquidation has led to significant drops in long holdings in gold and silver ETFs, highlighting ongoing market volatility.
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