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2025-10-17 11:32:44
[A Weak Dollar May See Its Biggest Weekly Drop in Three Months, Leading to Safe-Haven Flows into Gold] 1. The US dollar index continued its decline on Friday and is expected to post its biggest weekly drop in nearly three months. Investor confidence in the dollar has been dampened by escalating global trade tensions, weak US economic data, and the prolonged government shutdown. Recent statements by Federal Reserve officials in favor of further rate cuts have exacerbated the dollar's weakness. 2. The US dollar index is currently hovering around 98.20, down approximately 0.17% on the day and down approximately 0.65% so far this week, on track for its biggest weekly drop since late June. 3. As the dollar weakens, market demand for safe-haven assets has significantly increased, making gold a hotbed of capital flows. Dilin Wu, a strategist at Pepperstone Research, noted that the combined risks of trade friction, doubts about the Federal Reserve's independence, and the government shutdown have made the dollar vulnerable to short-selling. Investors are actively seeking durable alternatives such as gold and cryptocurrencies to hedge against potential market volatility. 4. Among non-US currencies, the Japanese yen remained strong after Bank of Japan Governor Kazuo Ueda mentioned the conditions for a possible interest rate hike, providing support for the currency. The euro and pound both rose slightly against the dollar, at $1.1708 and $1.3446 respectively. The market is paying attention to the speech to be delivered by Bank of Japan Deputy Governor Shinichi Uchida at 14:35 Beijing time for more policy clues. 5. Federal Reserve Board member Waller and new board member Milan both expressed support for interest rate cuts. Waller believes that the signals from the job market are complex and supports another interest rate cut at this month's meeting; Milan advocates a more radical path for interest rate cuts in 2025. These remarks reinforced the market's expectations for loose policies and further suppressed the US dollar.
