The dollar index (DXY00) on Thursday fell by -0.01%. The dollar Thursday fell back from a 1-1/2 month high and was little changed. A decline in T-note yields Thursday weighed on the dollar. Also, a rally in stocks Thursday reduced the liquidity demand for the dollar. The dollar Thursday initially moved higher on hawkish comments from New York Fed President Williams.
Thursday’s U.S. economic news was mixed for the dollar. On the bearish side, Q4 GDP was revised lower to +2.7% (q/q annualized) from the previously reported +2.9% as Q4 personal consumption was revised lower to +1.4% from +2.0%. Conversely, weekly initial unemployment claims unexpectedly fell -3,000 to 192,000, showing a stronger labor market than expectations of an increase to 200,000.
New York Fed President Williams said strong demand in the U.S. economy continues to exceed supply, pointing to persistent price pressures in the services sector. Also, the continued demand for goods, as well as ongoing supply-chain issues in the global economy, may keep prices from falling as quickly as some have expected. Â
EUR/USD (^EURUSD) on Thursday fell by -0.07%. The euro Thursday fell to a 1-1/2 month low on strength in the dollar. Losses in EUR/USD were limited after the Eurozone Jan core CPI was revised upward to a record high, which is hawkish for ECB policy.
Eurozone Jan core CPI was revised upward by +0.1 to a record +5.3% y/y from the initially reported +5.2% y/y.
USD/JPY (^USDJPY) on Thursday fell by -0.13%. The yen Thursday recovered from a 2-month low against the dollar and moved higher after T-note yields gave up an early advance and turned lower. The yen Thursday initially saw some downward pressure ahead of testimony on Friday from BOJ governor nominee Ueda before the Japanese Parliament. Trading activity in USD/JPY was light, with markets closed Thursday in Japan for the Emperor’s birthday holiday.
April gold (GCJ3) on Thursday closed down -14.70 (-0.80%), and March silver (SIH23) closed down -0.371 (-1.71%). Precious metals Thursday posted moderate losses, with gold falling to a 1-3/4 month low. A rally in the dollar index to a 1-1/2 month high Thursday was bearish for metals. Also, hawkish comments from New York Fed President Williams weighed on metals when he said strong demand in the U.S. economy continues to exceed supply, pointing to persistent price pressures in the services sector. In addition, gold prices are still weighed down by the continued liquidation of gold holdings in ETFs after holdings of gold in ETFs fell to a new 2-3/4 year low Wednesday.
More Precious Metal News from Barchart
- Stocks Fluctuate in the Afternoon
- Dollar Firms on Hawkish FOMC Meeting Minutes
- Stocks See Support as T-note Yields Fall Before FOMC Minutes
- Dollar Gains as T-Note Yields Jump and Stocks Slump
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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