The dollar index (DXY) fell by 0.64% on Monday, driven by diminishing demand for liquidity following a stock market rebound and a decline in T-note yields, which weakened interest rate differentials. The February Empire manufacturing index dropped to -0.2, significantly lower than the expected 3.9, while manufacturing production rose by 0.2% month-over-month, surpassing forecasts of 0.1%. Additionally, the March NAHB housing market index climbed to 38, beating expectations of 37.
In currency movements, the euro strengthened by 0.91% against the dollar, influenced by falling crude oil prices, which are supportive of the Eurozone economy that relies on energy imports. The USD/JPY pair fell by 0.47% as the yen recovered from a 1.75-year low, buoyed by Japanese Finance Minister Satsuki Katayama’s comments suggesting potential forex market intervention.
In precious metals, April COMEX gold closed down 1.18% at three-week lows, while May silver fell by 0.81%. Despite a weaker dollar and lower T-note yields providing some support, demand for precious metals was curbed by a rebound in stocks and inflationary concerns due to rising crude prices. Additionally, holdings in gold and silver ETFs have decreased significantly, indicating bearish sentiment amid ongoing geopolitical tensions.
