US Dollar Index Falls Amid Fed Uncertainty, Metals See Overseas Strength

The US Dollar Index fell by 0.2% to 99.78 overnight, marking its monthly decline at 1.37%. This comes as Fed Chairman Warsh kept interest rates unchanged this week, despite three officials dissenting in favor of an immediate rate hike to combat persistent inflation risks.

According to Katharine Neiss, Deputy Director of Global Economics at PGIM Credit, the US dollar's 'hawkish pivot' is likely to materialize in September, with a possible three consecutive rate hikes. Elias Haddad of Brown Brothers Harriman noted that while the US dollar drew support from resilient US economic activity, Warsh's failure to translate tough inflation rhetoric into credible policy action raised the risk of the Fed falling behind the curve.

In other market news, COMEX gold fell by 1.49% overnight, but posted its second straight weekly gain, up 0.68% for the week, with a July monthly gain of 1.49%. Meanwhile, LME copper edged up 0.03%, with a July gain of 3.16%, and LME aluminum rose 0.06%, gaining 2.9% in July.