On Monday, the dollar index (DXY) fell by 0.04% as discussions between the U.S., Iran, and regional mediators began regarding a possible 45-day ceasefire to end the ongoing war, dampening liquidity demand for the dollar. The U.S. March ISM services index declined to 54.0, below expectations of 54.9, while the prices paid sub-index rose to a 3.5-year high of 70.7, contributing to continued pressure on the dollar.
In currency movements, the euro (EUR/USD) increased by 0.21%, and the yen (USD/JPY) rose by 0.03%, both reacting to the weaker dollar. The swaps market indicates a 50% chance of a 25 basis point hike by the ECB and a 65% chance for the BOJ at their respective meetings in late April. Also on Monday, COMEX gold settled up 0.11% while silver declined by 0.11%, influenced by lower Treasury yields and ongoing safe-haven demand amid heightened geopolitical tensions.
Gold reserves held by China’s PBOC rose by 30,000 ounces to 74.22 million troy ounces in February, marking the sixteenth consecutive month of increases. Market activity was subdued due to European markets being closed for Easter Monday, further impacting trading volumes.
