The dollar index (DXY00) today is down by -0.22%.  The dollar is weaker today but remains above Thursday's 1.5-week low.  The dollar is being undercut today from strength in stocks, which reduces liquidity demand for the dollar.  The dollar is also under pressure afterPresident Trump late Thursday nominated Stephen Miran to be a temporary replacement for Adrianna Kugler as Fed Governor.  Miran is currently chairman of the Council of Economic Advisors and is seen as dovish and supporting President Trump's calls for lower interest rates.  Higher T-note yields today are limiting losses in the dollar.

In recent tariff news, President Trump announced Wednesday that he will impose a 100% tariff on semiconductor imports.  Still, companies would be eligible for exemptions if they demonstrate a commitment to building their products in the US.  However, the US will levy a separate tax on imports of electronic products that employ semiconductors.  Also, President Trump announced Wednesday that he will double tariffs on US imports from India to 50% from the current 25% tariff, due to India's purchases of Russian oil.  On Tuesday, Mr. Trump said that US tariffs on pharmaceutical imports would be announced "within the next week or so." According to Bloomberg Economics, the average US tariff will rise to 15.2% if rates are implemented as announced, up from 13.3% earlier, and significantly higher than the 2.3% in 2024 before the tariffs were announced. 

Federal funds futures prices are discounting the chances for a -25 bp rate cut at 91% at the September 16-17 FOMC meeting and 64% at the following meeting on October 28-29.

EUR/USD (^EURUSD) today is down by -0.06%.  The euro is slightly lower today and continues to struggle due to concerns that President Trump's tariff policies will curb economic growth in the Eurozone.  Losses in the euro are limited on hopes for an end to the Russian-Ukrainian war, with President Trump expected to meet with Russian President Putin in the next few days to discuss an end to the conflict.

Swaps are pricing in a 10% chance of a -25 bp rate cut by the ECB at the September 11 policy meeting.

USD/JPY (^USDJPY) today is up by +0.38%.  The yen is sliding today on concerns that US tariff policies will harm the Japanese economy.  Also, today's economic news showing weaker-than-expected Japanese household spending is dovish for BOJ policy and bearish for the yen.  In addition, higher T-note yields today are negative for the yen.   

The minutes of the July 30-31 BOJ meeting released today were slightly hawkish and supportive of the yen when a BOJ board member said the BOJ may be moving toward another interest rate hike by the end of the year, depending on the impact of US tariffs.  Also, today's news showing the Japan Jul eco watchers outlook survey rose to a 6-month high is bullish for the yen.

Japan June household spending rose +1.3% y/y, weaker than expectations of +2.7% y/y.

The Japan July eco watchers outlook survey rose +1.4 to a 6-month high of 47.3, stronger than expectations of 46.4.   

December gold (GCZ25) today is up +28.50 (+0.83%), and September silver (SIU25) is up +0.291 (+0.76%).  Precious metals are climbing today, with gold soaring to a 3.5-month high and silver climbing to a 2-week high.  Today's weaker dollar is supportive of metals.  Precious metals also garnered demand as a store of value today after President Trump nominated Stephen Miran to be a temporary replacement for Adrianna Kugler as Fed Governor.  Miran is seen as dovish and supporting President Trump's calls for lower interest rates.  In addition, gold prices are soaring on concern about supply disruptions after the US Customs and Border Protection agency said one-kilogram and 100-ounce gold bars exported by Switzerland into the US face tariffs. 

Gold buying by China's central bank is also supportive of gold prices as the PBOC bought 60,000 troy ounces of gold for its reserves in July, the ninth consecutive month it has boosted its gold purchases. 

Fund buying of precious metals continues to support prices after gold holdings in ETFs rose to a two-year high on Thursday, and silver holdings in ETFs reached a three-year high on the same day.

Precious metals still have safe-haven support on concerns that President Trump's tariff policies will weigh on global economic growth prospects. Finally, precious metals continue to receive safe-haven support from geopolitical risks, including the conflicts in Ukraine and the Middle East.