{"id":20520,"date":"2025-09-09T20:29:00","date_gmt":"2025-09-10T00:29:00","guid":{"rendered":"https:\/\/sharewatch.com\/wp\/2025\/09\/09\/dollar-supported-by-higher-t-note-yields-2\/"},"modified":"2025-09-09T20:29:00","modified_gmt":"2025-09-10T00:29:00","slug":"dollar-supported-by-higher-t-note-yields-2","status":"publish","type":"post","link":"https:\/\/sharewatch.com\/wp\/2025\/09\/09\/dollar-supported-by-higher-t-note-yields-2\/","title":{"rendered":"Dollar Supported by Higher T-note Yields"},"content":{"rendered":"<div class=\"layout__region nsdq-l-grid__item syndicated-article-body\">\n<section class=\"jupiter22-c-article-body\">\n<div class=\"body\">\n<div class=\"body__content\">\n<p>The dollar index (DXY00) on Tuesday recovered from a 1.5-month low and rose by +0.36%.\u00a0 Higher T-note yields on Tuesday strengthened the dollar&#8217;s interest rate differentials and sparked short covering in the dollar.\u00a0 The dollar initially whipsawed lower and then higher on Tuesday after preliminary benchmark payroll revisions to US payrolls in the year through March 2025 showed fewer jobs than previously stated.\u00a0 \u00a0<\/p>\n<p>Limiting the upside in the dollar are the increased expectations for Fed easing through year-end.\u00a0The dollar is also being undercut by concerns over Fed independence, which could prompt foreign investors to dump dollar assets as President Trump attempts to fire Fed Governor Cook, and by Stephen Miran&#8217;s intention to be a Fed Governor while still technically holding his White House job on the Council of Economic Advisors.\u00a0<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-veg\"  class=\"btf-bodymidpagetwothirdswidth-1\">          <script type=\"text\/javascript\">         googletag.cmd.push(function() {             \/\/ Check if ID matches ID in the window.adsList array before calling googletag.display             function isAdInAdsList(id) {             for (var i = 0; i < window.adsList.length; i++) {                 if (window.adsList[i].id === id) {                     return true;                 }             }             return false;         }         if (isAdInAdsList('js-dfp-tag-veg')) {             googletag.display('js-dfp-tag-veg');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>     <span>Join 200K+ Subscribers: <\/span> Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.  <\/p>\n<p>\u00a0<\/p>\n<p>The preliminary benchmark payroll revisions to US payrolls in the year through March 2025 showed -911,000 fewer jobs than previously stated, a wider loss than expectations of -700,000 and a sign of a weaker US labor market.<\/p>\n<p>The markets are now pricing in a 9% chance of a 50 bp rate cut at the upcoming FOMC meeting on Sep 16-17, versus the previous expectations of a zero chance of that 50 bp rate cut.\u00a0 After the fully expected -25 bp rate cut at the Sep 16-17 FOMC meeting, the markets are now discounting a 75% chance of a second -25 bp rate cut at the Oct 28-29 meeting, up from a 54% chance as of late Thursday.\u00a0 The markets are now pricing in an overall -73 bp rate cut in the federal funds rate by year-end to 3.65% from the current 4.38% rate.<\/p>\n<p>EUR\/USD (^EURUSD) fell from a 1.5-month high on Tuesday and finished down by -0.50% due to a rebound in the dollar.\u00a0 The euro was also pressured after French Jul manufacturing production posted its steepest decline in 14 months.\u00a0 The euro initially moved higher on Tuesday due to central bank divergence as the markets view the ECB as largely finished with its rate-cut cycle, while the Fed is expected to cut rates three times by the end of this year.\u00a0<\/p>\n<p>French Jul manufacturing production fell -1.7% m\/m, weaker than expectations of -1.2% m\/m and the largest decline in 14 months.<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-2rE\"  class=\"btf-bodymidpagetwothirdswidth-2\">          <script type=\"text\/javascript\">         googletag.cmd.push(function() {             \/\/ Check if ID matches ID in the window.adsList array before calling googletag.display             function isAdInAdsList(id) {             for (var i = 0; i < window.adsList.length; i++) {                 if (window.adsList[i].id === id) {                     return true;                 }             }             return false;         }         if (isAdInAdsList('js-dfp-tag-2rE')) {             googletag.display('js-dfp-tag-2rE');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>On the geopolitical front, diplomatic efforts to end the war in Ukraine remain elusive, which is bearish for the euro.\u00a0 Also, political uncertainty in France is negative for the euro, with French Prime Minister Bayrou resigning after losing a confidence motion in parliament on Monday.<\/p>\n<p>Swaps are pricing in no chance of a -25 bp rate cut by the ECB at Thursday's policy meeting.<\/p>\n<p>USD\/JPY (^USDJPY) on Tuesday fell by -0.03%.\u00a0 The yen rallied to a 3-week high against the dollar on Tuesday after Bloomberg News reported that people familiar with the matter said that BOJ officials are of the view that it may be possible to raise rates again this year, regardless of domestic political instability, as economic conditions have developed in line with expectations.\u00a0 The yen also found support from Tuesday's Japanese economic news that showed Aug machine tool orders posted their biggest increase in 5 months.\u00a0However, the yen fell back from its best level and posted only modest gains as T-note yields rose.\u00a0<\/p>\n<p>Political uncertainty in Japan is bearish for the yen after Japanese Prime Minister Ishiba said he will step down following two election results that stripped Japan's ruling Liberal Democratic Party of its majorities in both houses of parliament, which is seen as paving the way toward a more expansionary fiscal policy.\u00a0<\/p>\n<p>Japan Aug machine tool orders rose +8.1% y\/y, the biggest increase in 5 months.<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-Z3g\"  class=\"btf-bodymidpagetwothirdswidth-3\">          <script type=\"text\/javascript\">         googletag.cmd.push(function() {             \/\/ Check if ID matches ID in the window.adsList array before calling googletag.display             function isAdInAdsList(id) {             for (var i = 0; i < window.adsList.length; i++) {                 if (window.adsList[i].id === id) {                     return true;                 }             }             return false;         }         if (isAdInAdsList('js-dfp-tag-Z3g')) {             googletag.display('js-dfp-tag-Z3g');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>December gold (GCZ25) on Tuesday closed up +4.80 (+0.13%), and December silver (SIZ25) closed down -0.561 (-1.34%).\u00a0 Precious metal prices settled mixed on Tuesday, with Dec gold posting a contract high and nearest-futures (U25) posting a record high of $3,670.40 an ounce. \u00a0Expectations for Fed interest rate cuts through year-end are boosting demand for precious metals as a store of value.\u00a0 Also, increased gold buying from China's central bank is supportive for prices after the PBOC boosted its gold purchases by +0.06 million troy ounces in August to 74.02 million troy ounces, marking the tenth consecutive month the central bank has increased its gold reserves.\u00a0 Strength in the dollar and higher global government bond yields on Tuesday limited gains in gold.<\/p>\n<p>Concern that a weaker-than-expected US labor market will lead to reduced demand for industrial metals undercut silver prices on Tuesday after the preliminary benchmark payroll revisions to US payrolls in the year through March 2025 showed fewer jobs than previously stated, a sign of a weak labor market.<\/p>\n<p>Gold prices continue to receive support from uncertainty tied to US tariffs and geopolitical risks.\u00a0Also, political uncertainty in France and Japan is driving demand for gold as a safe-haven asset.\u00a0 French Prime Minister Bayrou resigned after losing a confidence vote in parliament on Monday, and Japanese Prime Minister Ishiba said he will step down following two election results that stripped Japan's ruling Liberal Democratic Party of its majorities in both houses of parliament, which is seen as paving the way toward a more expansionary fiscal policy.\u00a0<\/p>\n<p>Precious metals prices continue to receive support from fund buying of precious metal ETFs.\u00a0 Gold holdings in ETFs rose to a 2.25-year high on Monday, and silver holdings in ETFs rose to a 3-year high last Wednesday.<\/p>\n<p class=\"body__disclaimer\">     On the date of publication,      Rich Asplund              did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.          For more information please view the Barchart Disclosure Policy      here. <\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-J7A\"  class=\"btf-bodymidpagetwothirdswidth-4\">          <script type=\"text\/javascript\">         googletag.cmd.push(function() {             \/\/ Check if ID matches ID in the window.adsList array before calling googletag.display             function isAdInAdsList(id) {             for (var i = 0; i < window.adsList.length; i++) {                 if (window.adsList[i].id === id) {                     return true;                 }             }             return false;         }         if (isAdInAdsList('js-dfp-tag-J7A')) {             googletag.display('js-dfp-tag-J7A');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<\/p>\n<p class=\"body__disclaimer\">The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/section>\n<p>        <script type=\"text\/javascript\">   \/\/ add oddAd class to every odd instance of body .ads__inline for different placeholder styles   let articleAds = document.querySelectorAll('.ads__inline');   for (let i = 0, len = articleAds.length; i < len; i++) {     \/\/ Do the below only if the curent count is less than 12     if ((i < 12) &#038;&#038; (i % 2 === 0)) {       articleAds[i].className += ' oddAd';     }   } <\/script>                                               <\/p>\n<div class=\"jupiter22-c-tags jupiter22-c-tags-default\">\n<h3 class=\"jupiter22-c-tags-title\">         Tags       <\/h3>\n<div class=\"jupiter22-c-tags-container\">Stocks<\/div>\n<\/p><\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The dollar index (DXY00) on Tuesday recovered from a 1.5-month low and rose by +0.36%.\u00a0 Higher T-note yields on Tuesday strengthened the dollar&#8217;s interest rate differentials and sparked short covering in the dollar.\u00a0 The dollar initially whipsawed lower and then higher on Tuesday after preliminary benchmark payroll revisions to US payrolls in the year through 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