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The dollar index fell by 0.06% on Wednesday, marking a 1-week low amid government shutdown concerns and weak labor market data. The September ADP employment change showed a surprising decline of 32,000, well below expectations of a 51,000 increase, which boosted the probability of a Federal Reserve rate cut at the upcoming FOMC meeting on October 28-29 to 100% in swaps markets. In contrast, the September ISM manufacturing index rose to a 7-month high of 49.1, exceeding forecasts of 49.0.
In Europe, the euro gained slightly, supported by a positive revision of the Eurozone September S&P manufacturing PMI to 49.8 and an increase in consumer prices, with the September CPI rising 2.2% year-on-year. Meanwhile, the Japanese yen reached a 2-week high against the dollar as safe-haven demand surged due to U.S. political instability, alongside positive economic indicators like Japan’s Q3 Tankan large manufacturing sentiment index, which rose to 14.
In precious metals, December gold closed up $24.30 at a new contract high, and December silver rose by $1.039, influenced by the dollar’s weakness and rising safe-haven demand amid U.S. political uncertainties. Gold ETF holdings have also surged to nearly a 3-year high, reflecting increased investor interest in safe-haven assets.
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