Dollar Surges Amid Weakening Euro and Rising Bond Yields
The US Dollar Index (USD Index) has been on a strong run this week, reaching its highest level since April 2025. Despite soft inflation data and decreased odds of an October Fed hike, the dollar continues to rise.
This strength is partly due to Europe's economic troubles, which have pushed the euro below $1.13 for the first time since May 2025. The bond market has also played a significant role, with long-term yields continuing to rise despite the Fed's softer stance.
The key takeaway is that when the headlines suggest a less hawkish Fed, it's essential to check the long-end yields before drawing conclusions for gold. If these yields continue to rise, a softer Fed will likely not lift the metal.
The September jobs report is due today, with a hot report potentially being bullish for gold and a weak one helping its price. However, if gold fails to react positively to this news, it would be the second failure in three sessions.