Dollar Strength Pressures British Pound and Metals

The standout move on Wednesday, September 23 came from the British Pound, several times the size of its usual day. The currency weakened during regular trading, with the pound -0.8% against the dollar. Pressure mounted as the latest survey data showed services activity slowed to a three-month low of 51.7. Sterling faced further headwinds after public sector borrowing exceeded expectations ahead of the UK budget. At the same time, hawkish Federal Reserve expectations lifted the dollar to near two-month highs across foreign exchange markets.

Precious metals also moved lower across the session. A fresh report showed business activity expanded at the fastest pace in over five years, with the flash composite index reaching 58.4. The robust economic print pushed benchmark 10-year Treasury yields to their highest mark since 2007, which weighed heavily on gold and silver prices. Commodity trading continues round the clock after equity markets close, and by 10:30 am New York, the pullback broadened, with silver -5.0% and gold -2.8%.

The euro weakened against the dollar as well, with the euro -0.6% against the dollar. European currency trading was driven largely by the broader dollar advance, as expectations of tighter Federal Reserve policy lifted the dollar against major continental counterparts.

In digital assets, trading remained calm, with Bitcoin +0.3% and Ethereum +0.4%.

Looking ahead, several economic releases and government operations are scheduled. On Thursday, the calendar features weekly initial jobless claims, August new-home sales, and a 7-year Treasury note auction. On Friday, the schedule includes advance durable goods orders for August, alongside employee benefits data.