The dollar index (DXY00) rose by +0.26% today, reaching a 13-month high, fueled by the Federal Reserve’s hawkish stance projecting higher interest rates later this year. Meanwhile, U.S. May new home sales experienced an unexpected decline of -7.3% month-over-month, falling to 580,000, contrary to expectations of an increase to 640,000. The U.S. Q1 current account balance also reported a larger deficit of -$225.8 billion versus the anticipated -$208.9 billion.
In Europe, the EUR/USD fell to a one-year low, dropping -0.31%, primarily due to the euro’s weakening amid dovish comments from ECB President Lagarde regarding additional rate hikes. The German IFO business confidence index for June rose to 85.6, exceeding predictions of 85.5. In Japan, the yen remains under pressure, hovering near a 23-month low against the dollar, as fears grow regarding the Bank of Japan’s slowness in monetary policy normalization.
In the commodities market, gold prices fell significantly, with August COMEX gold down -2.73% to a 7.5-month low, while July COMEX silver declined -4.76%. Precious metals are grappling with carryover effects from the Fed’s announcement regarding interest rate increases and a decrease in WTI crude oil prices, which has eased inflation expectations.
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