The U.S. dollar index (DXY00) fell to a 7-week low on Monday before staging a near-complete recovery driven by stronger-than-expected American manufacturing data. The U.S. July ISM manufacturing index climbed by 2.3 points to 55.6, exceeding analyst expectations of 53.9 and marking the fastest pace of expansion in four years. Markets are currently pricing in a 67% probability of a 25 basis point rate hike at the next FOMC meeting scheduled for September 15-16. The BOJ’s current policy rate of 1.00% remains well below the Federal Reserve’s federal funds rate target of 3.50% to 3.75%, continuing to weigh on the yen through interest rate differentials. Supporting gold prices, bullion held in China’s PBOC reserves rose by 480,000 ounces to 75.44 million troy ounces in June, marking the twentieth consecutive month the central bank increased its gold holdings.