Dollar Hits Yearly Low as Gold Reaches Record High Amid Fed Rate Cut Speculation

The dollar dropped to its lowest point this year against the yen, and gold surged to a record high following expectations of a significant Federal Reserve interest rate cut. Stocks, Treasury prices, and commodities rallied, driven by increased speculation of a half-point cut from the Federal Reserve next week.

The dollar fell to its lowest point this year against the yen on Friday while gold hit a record high, spurred by investor expectations of a significant Federal Reserve interest rate cut next week.

Stocks, Treasury prices, and commodities experienced a surge after traders increased the chances of a half-point rate cut by the Fed to 41%, a steep rise from 14% just a day earlier. Influential comments from former New York Fed President Bill Dudley and City Index market strategist Fiona Cincotta influenced this shift in market sentiment.

This movement comes amid supportive comments from Bank of Japan officials and favorable gains in global shares, with the dollar index dropping to a one-week low and benchmark 10-year Treasuries rallying. Crude oil prices also climbed as producers assessed the impact of Hurricane Francine.

(With inputs from agencies.)