Why the Dollar Just Hit a 1.5-Week Peak Today

The greenback is having a moment. DXY rallied +0.39% to a 1.5-week high, riding on two key drivers:

1) Yen Getting Wrecked — JPY tumbled to a 9.75-month low after Japanese officials hinted at a massive 20 trillion yen ($129B) stimulus package. Dovish BOJ signals also weighed on the currency, with rate hike odds now at just 15% for December.

2) Better Trade Data — The August US trade deficit shrank to -$59.6B (better than -$60.4B expected), signaling slight economic resilience.

Market Take: Fed rate cut odds for December fell to 47% (from 70% earlier this month). EUR/USD slipped -0.23% as dollar strength pressured the euro, though ECB rate-cut divergence limited losses.

Safe Haven Play: Gold and silver popped (+1.55% and +3.03% respectively) on BOJ dovishness and geopolitical uncertainty, but strong dollar headwinds are capping the rally. China’s PBOC added gold reserves for the 12th straight month—central bank buying remains a floor under prices despite the greenback’s strength.