The US dollar index (DXY00) is down 0.20% following weaker-than-expected economic data. The February nonfarm payrolls fell by 92,000, contrary to expectations of a 55,000 increase, marking the largest decline in four months. The unemployment rate rose to 4.4%, up 0.1% from 4.3%. Additionally, January retail sales decreased by 0.2%, better than the predicted 0.3% decline.
In comments that supported the dollar, Fed Governor Christopher Waller stated that the ongoing Iran conflict is unlikely to cause sustained inflation. Markets are currently pricing in an 8% chance of a 25 basis point rate cut at the Federal Reserve’s next meeting on March 17-18.
Meanwhile, gold prices rose by 1.55%, fueled by geopolitical tensions and increasing demand for safe-haven assets, as President Trump indicated a lack of interest in negotiating an end to the Iran conflict. Strong central bank demand was also noted, with China’s PBOC increasing its gold reserves by 40,000 ounces to 74.19 million troy ounces in January.
