The dollar index (DXY00) on Monday fell by -0.86% and posted a 3-1/2 week low.  The ongoing turmoil in the U.S. banking sector is undercutting the dollar. Also, a sharp decline in T-note yields Monday weighed on the dollar as the turmoil in the banking sector reduced expectations of tighter Fed policy. In addition, a rebound in equity markets after early losses reduced the liquidity demand for the dollar.Â
EUR/USD (^EURUSD) on Monday rose by +0.79% and posted a 3-1/2 week high.  The euro on Monday moved higher on the sell-off in the dollar. EUR/USD also has support on expectations for the ECB to raise interest rates by +50 bp at Thursday’s policy meeting.Â
USD/JPY (^USDJPY) on Monday fell by -1.19%. The yen Monday rallied for a third session and climbed to a 3-1/2 week high against the dollar. The sell-off in the Nikkei Stock Index Monday to a 1-week low sparked some safe-haven demand for the yen. Also, the sharp fall in T-note yields Monday was bullish for the yen.Â
Japan’s economic news Monday was bearish for the yen after the Q1 BSI large manufacturing business conditions fell -6.9 to a 2-1/2 year low of -10.5.Â
April gold (GCJ3) on Monday closed up +49.30 (+2.64%), and May silver (SIK23) closed up +1.417 (+6.91%). Precious metals Monday rallied sharply for a second session, with gold climbing to a 5-week high and silver jumping to a 2-week high. Concerns about contagion risk from the collapse of Silicon Valley Bank and the closing of Signature Bank of New York have sparked safe-haven buying of precious metals. Also, the sell-off in the dollar Monday to a 3-1/2 week low is bullish for metals prices. In addition, Monday’s slump in global bond yields supports metals. A bearish factor for gold is the continued liquidation of long gold positions in ETFs after gold holdings fell to a new 2-3/4 year low last Friday.Â
More Precious Metal News from Barchart
- Stocks Higher as a Plunge in Bond Yields Supports the Broader Market
- Dollar Retreats on Turmoil in the U.S. Banking Sector
- Stocks Weighed Down by Bank Jitters
- Dollar Slips with Bond Yields
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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