Dollar Slides and Gold Rallies to a Record on the Outlook for Fed Rate Cuts

Group 1: Dollar Index and Federal Reserve Expectations - The dollar index fell by -0.32%, reaching a new 1.5-month low due to a weak US unemployment report and increased expectations for Federal Reserve easing [1] - Markets are now pricing in a 15% chance of a 50 basis point rate cut at the upcoming FOMC meeting, a significant shift from previous expectations of zero chance [2] - An overall -75 basis point rate cut in the federal funds rate is anticipated by year-end, reducing the rate from 4.38% to 3.62% [2] Group 2: Euro Performance and Economic Indicators - The EUR/USD rose by +0.40%, reaching a 1.5-month high, supported by a weaker dollar and expectations that the ECB is nearing the end of its rate-cut cycle [3] - German industrial production for July increased by +1.3% month-over-month, exceeding expectations, marking the largest increase in four months [5] - The Eurozone September Sentix investor confidence index unexpectedly fell to a 5-month low of -9.2, indicating weaker investor sentiment [4] Group 3: Geopolitical and Political Factors - Ongoing diplomatic challenges in Ukraine and political uncertainty in France are negatively impacting the euro [4] - French Prime Minister Bayrou lost a confidence motion in parliament, contributing to the political instability affecting the euro [4]