The dollar index climbed to a 1-week high on Friday, finishing up +0.19%, buoyed by yen weakness and supportive remarks from New York Fed President John Williams, who noted encouraging data and a stable jobs market. Despite the rise, the dollar faced downward pressure following an unexpected revision of the University of Michigan’s US December consumer sentiment index, which fell to 52.9 from previous expectations of an increase to 53.5. Additionally, US existing home sales for November increased by +0.5% month-over-month to a nine-month high of 4.13 million, though falling short of the anticipated 4.15 million.
In the Eurozone, the euro dropped to a 1-week low, reflecting weaker-than-expected economic data including a -2.3% decline in German producer prices year-over-year. This came as Germany announced plans to increase federal debt sales by nearly 20% to fund government spending. Meanwhile, the Bank of Japan raised its overnight call rate by +25 basis points to 0.75%, with yields on Japanese government bonds rising to a 26-year high of 2.025%. Concerns over Japan’s fiscal policy and a potential record budget for 2026 also contributed to the yen’s decline.
Precious metals saw a mixed performance; February COMEX gold closed up +0.52%, while March COMEX silver rose significantly by +3.48%, driven by record high prices and strong central bank demand, specifically from China’s PBOC, which increased gold reserves for the thirteenth consecutive month. Nevertheless, rising global bond yields and hawkish comments from the Fed limited gains in the precious metals market.
