The dollar index (DXY) fell to a 6-week low, declining by 0.33% on April 17, 2023, driven by easing geopolitical tensions as the US and Iran consider extending a two-week ceasefire. The March Producer Price Index (PPI) for final demand rose only 0.5% month-over-month (m/m) and 4.0% year-over-year (y/y), falling short of expectations of 1.1% m/m and 4.6% y/y.
The euro (EUR/USD) rallied to a 6-week high, up 0.37%, benefiting from dollar weakness and a 5% plunge in crude oil prices, which supports the Eurozone economy. The European Central Bank (ECB) has a 27% chance for a 25 basis point rate hike at its April 30 meeting, with President Christine Lagarde indicating mixed projections due to the situation in Iran.
Meanwhile, the yen (USD/JPY) decreased by 0.48%, influenced by the same dollar weakness and a revision of Japan’s February industrial production to -2.0% m/m. The Bank of Japan (BOJ) also faces 34% odds for a rate hike at its meeting on April 28. In precious metals, gold increased by 1.22%, and silver rose by 4.08%, buoyed by the dollar’s decline and optimism about the US-Iran negotiations.
