{"id":23275,"date":"2025-10-09T21:09:00","date_gmt":"2025-10-10T01:09:00","guid":{"rendered":"https:\/\/sharewatch.com\/wp\/2025\/10\/09\/dollar-rallies-on-higher-bond-yields-and-hawkish-fed-speak\/"},"modified":"2025-10-09T21:09:00","modified_gmt":"2025-10-10T01:09:00","slug":"dollar-rallies-on-higher-bond-yields-and-hawkish-fed-speak","status":"publish","type":"post","link":"https:\/\/sharewatch.com\/wp\/2025\/10\/09\/dollar-rallies-on-higher-bond-yields-and-hawkish-fed-speak\/","title":{"rendered":"Dollar Rallies on Higher Bond Yields and Hawkish Fed Speak"},"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 Thursday rose by +0.63% and posted a 2.25-month high. \u00a0Higher bond yields on Thursday were supportive of the dollar, along with weakness in stocks, which sparked some liquidity demand for the dollar. \u00a0Gains in the dollar accelerated on Thursday on hawkish comments from Fed Governor Michael Barr, who called for a cautious approach to further Fed rate cuts. \u00a0Political risks in France and Japan are undercutting the euro and yen, respectively, to the benefit of the dollar.<\/p>\n<p>The ongoing shutdown of the US government is bearish for the dollar as the shutdown entered its second week on Monday.\u00a0 The longer the shutdown is maintained, the more likely the US economy will suffer, a negative factor for the dollar.\u00a0<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-zFY\"  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-zFY')) {             googletag.display('js-dfp-tag-zFY');         }         });     <\/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>Fed Governor Michael Barr called for a cautious approach to further Fed rate cuts, saying there's a possibility that tariffs will create persistent inflation.<\/p>\n<p>New York Fed President John Williams said he would support \"lower rates this year\" if the economy evolved as expected, with inflation rising to around 3% and the unemployment rate increasing beyond its current 4.3%.\u00a0 He added. \u00a0\"There's more downside risks to the labor market and employment, and that is something that takes some of the upside risk off of inflation.\"<\/p>\n<p>The markets are pricing in a 95% chance of a -25 bp rate cut at the next FOMC meeting on Oct 28-29.<\/p>\n<p>EUR\/USD (^EURUSD) on Thursday fell by -0.64% and posted a 2.25-month low. \u00a0Dollar strength on Thursday undercut the euro.\u00a0 Also, weaker-than-expected German trade news is weighing on the euro after German Aug exports and imports declined.\u00a0 Political uncertainty in France is also weighing in the euro, although President Macron said Thursday that he'll name a new prime minister by Friday evening, which could avoid the need to call for a snap election.<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-YVc\"  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-YVc')) {             googletag.display('js-dfp-tag-YVc');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>The account of the ECB's September 10-11 meeting was slightly hawkish and supportive for the euro as policymakers decided against an interest rate cut amid upside inflation risks, saying \"While a further rate cut in the coming months would better protect the inflation target both under the baseline and across a range of adverse scenarios, the materialization of upside risks would instead warrant maintaining the current level of the policy rate.\"<\/p>\n<p>German Aug exports unexpectedly fell -0.5% m\/m, weaker than expectations of +0.2% m\/m.\u00a0 Aug imports fell -1.3% m\/m, weaker than expectations of -0.5% m\/m.<\/p>\n<p>Swaps are pricing in a 1% chance of a -25 bp rate cut by the ECB at the October 30 policy meeting.<\/p>\n<p>USD\/JPY (^USDJPY) on Thursday rose by +0.30%.\u00a0 The yen extended this week's selloff on Thursday and fell to a 7.75-month low against the dollar.\u00a0 The yen remains under pressure due to concerns that the election of Sanae Takaichi as the leader of Japan's ruling Liberal Democratic Party, which makes her the likely new Prime Minister of Japan, will result in a slower timeline for the BOJ's policy tightening.\u00a0 Takaichi's surprise victory has tempered expectations that the BOJ may raise interest rates as soon as this month, while raising concerns about an increased debt supply due to her support for expanded financial stimulus.\u00a0 Higher T-note yields on Thursday also undercut the yen.\u00a0<\/p>\n<p>Losses in the yen are limited today after today's news showed Japan's Sep machine tool orders posted their biggest increase in six months.\u00a0 Also, higher Japanese government bond yields have strengthened the yen's interest rate differentials after the 10-year JGB bond yield climbed to a 17-year high today at 1.701%.<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-Z2k\"  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-Z2k')) {             googletag.display('js-dfp-tag-Z2k');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>Japan Sep machine tool orders rose +9.9% y\/y, the biggest increase in six months.<\/p>\n<p>December gold (GCZ25) on Thursday closed down -97.90 (-2.41%), and December silver (SIZ25) closed down -1.85 (-3.76%).\u00a0 Precious metals sold off on Thursday, with Dec silver falling from a contract high, and nearest-futures (V25) retreating from a 14-year high.<\/p>\n<p>Thursday's rally in the dollar index at a 2.25-month high sparked long liquidation in precious metals.\u00a0Also, higher global bond yields on Thursday weighed on precious metals.\u00a0 Gold prices also came under pressure Thursday due to reduced safe-haven demand after Israel and Hamas announced a ceasefire.\u00a0 Losses in precious metals accelerated on Thursday on hawkish comments from Fed Governor Michael Barr, who called for caution toward additional Fed interest rate cuts.<\/p>\n<p>Precious metals have surged over the past seven weeks, with Dec gold posting a contract high and nearest-futures (V25) gold posting an all-time high of $4,049.20 a troy ounce on Wednesday.\u00a0 With the US government remaining closed, demand for safe-haven assets, including precious metals, has increased.\u00a0 Also, political turmoil in France is boosting safe-haven demand for precious metals after French Prime Minister Lecornu resigned when President Macron named a new cabinet.\u00a0 In addition, demand for precious metals as a store of value is supporting prices after Sanae Takaichi, a proponent of easy fiscal and monetary policy, won Saturday's election to become the leader of the ruling LDP party and is likely to become the new Japanese Prime Minister. \u00a0In addition, central bank buying of gold is underpinning gold prices after the People's Bank of China (PBOC) boosted its gold reserves for the 11th consecutive month in September, and Polish Central Bank Governor Glapinski stated today that his central bank continues to buy gold, with gold accounting for a quarter of its reserves.\u00a0<\/p>\n<p>Precious metals continue to receive safe-haven support due to uncertainty tied to US tariffs, geopolitical risks, and global trade tensions.\u00a0 Also, President Trump's attacks on Fed independence are boosting demand for gold.\u00a0 In addition, recent weaker-than-expected US economic news has bolstered the outlook for the Fed to keep cutting interest rates, a bullish factor for precious metals.\u00a0The swaps market shows a 95% chance the Fed will cut the federal funds target range by 25 bp at the October 28-29 FOMC meeting.<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-ncw\"  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-ncw')) {             googletag.display('js-dfp-tag-ncw');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>Precious metals prices continue to receive support from fund buying of precious metal ETFs.\u00a0 Gold holdings in ETFs rose to a 3-year high on Wednesday, and silver holdings in ETFs rose to a 3-year high last Wednesday.<\/p>\n<p><i>     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. <\/i><\/p>\n<p>\u00a0<\/p>\n<p> More news from Barchart <\/p>\n<ul>\n<li>4 High-Reward, Low-Risk Ways to Profit From the Record Rally in Gold Prices<\/li>\n<li>Will Bitcoin Experience a Substantial Correction?<\/li>\n<li>Gold, Silver, and U.S. Stocks Are All at Record Highs. What Gives?<\/li>\n<li>Are Gold Futures at $4,000 Dangerously Overbought, or an Unstoppable Freight Train?<\/li>\n<\/ul>\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 Thursday rose by +0.63% and posted a 2.25-month high. \u00a0Higher bond yields on Thursday were supportive of the dollar, along with weakness in stocks, which sparked some liquidity demand for the dollar. \u00a0Gains in the dollar accelerated on Thursday on hawkish comments from Fed Governor Michael Barr, who called for [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":23276,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ocean_post_layout":"","ocean_both_sidebars_style":"","ocean_both_sidebars_content_width":0,"ocean_both_sidebars_sidebars_width":0,"ocean_sidebar":"","ocean_second_sidebar":"","ocean_disable_margins":"enable","ocean_add_body_class":"","ocean_shortcode_before_top_bar":"","ocean_shortcode_after_top_bar":"","ocean_shortcode_before_header":"","ocean_shortcode_after_header":"","ocean_has_shortcode":"","ocean_shortcode_after_title":"","ocean_shortcode_before_footer_widgets":"","ocean_shortcode_after_footer_widgets":"","ocean_shortcode_before_footer_bottom":"","ocean_shortcode_after_footer_bottom":"","ocean_display_top_bar":"default","ocean_display_header":"default","ocean_header_style":"","ocean_center_header_left_menu":"","ocean_custom_header_template":"","ocean_custom_logo":0,"ocean_custom_retina_logo":0,"ocean_custom_logo_max_width":0,"ocean_custom_logo_tablet_max_width":0,"ocean_custom_logo_mobile_max_width":0,"ocean_custom_logo_max_height":0,"ocean_custom_logo_tablet_max_height":0,"ocean_custom_logo_mobile_max_height":0,"ocean_header_custom_menu":"","ocean_menu_typo_font_family":"","ocean_menu_typo_font_subset":"","ocean_menu_typo_font_size":0,"ocean_menu_typo_font_size_tablet":0,"ocean_menu_typo_font_size_mobile":0,"ocean_menu_typo_font_size_unit":"px","ocean_menu_typo_font_weight":"","ocean_menu_typo_font_weight_tablet":"","ocean_menu_typo_font_weight_mobile":"","ocean_menu_typo_transform":"","ocean_menu_typo_transform_tablet":"","ocean_menu_typo_transform_mobile":"","ocean_menu_typo_line_height":0,"ocean_menu_typo_line_height_tablet":0,"ocean_menu_typo_line_height_mobile":0,"ocean_menu_typo_line_height_unit":"","ocean_menu_typo_spacing":0,"ocean_menu_typo_spacing_tablet":0,"ocean_menu_typo_spacing_mobile":0,"ocean_menu_typo_spacing_unit":"","ocean_menu_link_color":"","ocean_menu_link_color_hover":"","ocean_menu_link_color_active":"","ocean_menu_link_background":"","ocean_menu_link_hover_background":"","ocean_menu_link_active_background":"","ocean_menu_social_links_bg":"","ocean_menu_social_hover_links_bg":"","ocean_menu_social_links_color":"","ocean_menu_social_hover_links_color":"","ocean_disable_title":"default","ocean_disable_heading":"default","ocean_post_title":"","ocean_post_subheading":"","ocean_post_title_style":"","ocean_post_title_background_color":"","ocean_post_title_background":0,"ocean_post_title_bg_image_position":"","ocean_post_title_bg_image_attachment":"","ocean_post_title_bg_image_repeat":"","ocean_post_title_bg_image_size":"","ocean_post_title_height":0,"ocean_post_title_bg_overlay":0.5,"ocean_post_title_bg_overlay_color":"","ocean_disable_breadcrumbs":"default","ocean_breadcrumbs_color":"","ocean_breadcrumbs_separator_color":"","ocean_breadcrumbs_links_color":"","ocean_breadcrumbs_links_hover_color":"","ocean_display_footer_widgets":"default","ocean_display_footer_bottom":"default","ocean_custom_footer_template":"","ocean_post_oembed":"","ocean_post_self_hosted_media":"","ocean_post_video_embed":"","ocean_link_format":"","ocean_link_format_target":"self","ocean_quote_format":"","ocean_quote_format_link":"post","ocean_gallery_link_images":"on","ocean_gallery_id":[],"footnotes":""},"categories":[18],"tags":[],"class_list":["post-23275","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock","entry","has-media"],"_links":{"self":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/posts\/23275","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/comments?post=23275"}],"version-history":[{"count":0,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/posts\/23275\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/media\/23276"}],"wp:attachment":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/media?parent=23275"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/categories?post=23275"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/tags?post=23275"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}