Dollar Rallies as Stocks Retreat

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) rose by +0.37%, reaching a 3-month high, driven by increased liquidity demand due to a slump in equity markets and support from Fed Chair Powell's comments on interest rates [1] - The ongoing US government shutdown is exerting pressure on the dollar, with a longer shutdown likely to harm the US economy and increase the chances of Fed interest rate cuts [2] - October Wards total vehicle sales slowed to 15.32 million, below expectations of 15.50 million, marking the lowest sales in 14 months, contributing to bearish sentiment for the dollar [3] Group 2: Eurozone Economic Outlook - The euro (EUR/USD) fell by -0.36%, reaching a 3-month low, primarily due to the strength of the dollar and comments from ECB officials regarding growth risks in the Eurozone [3] - ECB Governing Council member Stournaras highlighted multiple downside risks to Eurozone growth, including trade policy uncertainty and geopolitical tensions, which negatively impacted the euro [4] - ECB member Rehn noted that Eurozone growth remains sluggish but resilient, with inflation risks being two-sided, emphasizing the need for flexibility in interest rate decisions [4]