Market Drivers – US Session: US Dollar Retreats as Global Uncertainty Drives Market Shifts

The US Dollar took a notable step back, hitting its lowest levels in days. Investors are grappling with the potential for future interest rate cuts by the central bank, combined with the economic uncertainties caused by a prolonged US federal government shutdown. This weakening sentiment for the dollar has had a ripple effect across major currency pairs and other assets. Looking ahead, market participants will be paying close attention to upcoming comments from central bank officials.

The Euro gained strength against the weaker dollar, climbing to a one-week high and setting its sights on a significant resistance level. A key focus for the currency bloc this week will be the release of final inflation figures. Similarly, the British Pound extended its recent advance, moving past a major psychological mark.

Across the globe, the Japanese Yen saw a third consecutive day of gains against the dollar, moving closer to a critical trading point. Meanwhile, the Australian Dollar saw mixed trading but managed to find support, with markets awaiting a speech from a central bank representative next week.

In the commodity markets, Gold continued its impressive rally, reaching a new all-time high amid heightened geopolitical concerns, growing expectations for US rate cuts, and the persistent uncertainty surrounding the shutdown. Silver also surged, achieving a record high. However, crude oil prices faced downward pressure, slipping to a five-month low. This decline was triggered by reports concerning potential shifts in global oil imports and an unexpected increase in US crude inventories, though broader geopolitical tensions prevented a steeper fall.