The U.S. dollar index (DXY) fell by 0.75% on Thursday, pressured by a rally in the British pound, euro, and Japanese yen, following hawkish remarks from their respective central banks regarding inflation due to escalating energy prices linked to the war in Iran. Additionally, U.S. new home sales for January dropped 17.6% month-over-month to 587,000, marking a 3.25-year low, worse than the anticipated 722,000.
Initial unemployment claims in the U.S. unexpectedly decreased by 8,000 to 205,000, reflecting a stronger labor market than the expected increase to 215,000. The Philadelphia Fed business outlook survey for March rose to a six-month high of 18.1, exceeding predictions of a decline to 8.0. The European Central Bank (ECB) kept its deposit facility rate unchanged at 2.00% and revised its 2026 GDP forecast to 0.9% from 1.2%, while raising the inflation forecast to 2.3% from 2.2%.
In Japan, the Bank of Japan (BOJ) maintained its overnight call rate at 0.75%, with speculation of a possible rate hike in April due to rising energy prices. January industrial production was revised upwards to 4.3%, the largest increase in 3.5 years, while core machine orders fell by 5.5%, less than the expected decline of 9.6%. Precious metals saw significant losses, with gold and silver dropping to six-week lows amid rising global bond yields and decreased industrial demand.
