The dollar index (DXY) reached a 9.5-month high on Friday, closing up 0.65%, driven by ongoing tensions in Iran that threaten to keep crude oil prices elevated. This situation is prompting the Federal Reserve to reconsider cutting interest rates. U.S. personal spending in January rose 0.4%, above forecasts, while personal income increased by 0.4%, slightly below expectations. However, the Q4 GDP was revised down to 0.7%, and core PCE inflation stood at 3.1% year-on-year, matching projections.
In currency markets, the euro fell to a 7.5-month low, down 0.74%, influenced by rising crude prices that negatively impact the Eurozone economy. The yen also hit a 20-month low against the dollar, coinciding with a 3% jump in crude oil prices. Gold and silver prices dropped sharply, with gold closing down 1.25% and silver down 4.43%. Despite the decline, demand for precious metals remains due to geopolitical tensions and central bank purchases, notably from China’s PBOC, which increased gold reserves to 74.19 million troy ounces.
