The U.S. dollar index (DXY) fell by 1.13% today, marking a 4-week low. This decline follows the U.S. and Iran’s agreement on a ceasefire, which reduced safe-haven demand for the dollar. Additionally, a surge in equity markets and a decrease in Treasury note yields have negatively impacted the dollar’s appeal, with swaps markets indicating only a 2% chance of a +25 basis point rate hike at the April 28-29 FOMC meeting.
Meanwhile, the euro strengthened by 0.91% against the dollar, reaching a 5-week high, while Eurozone retail sales fell by 0.2% month-over-month in February, the largest decline in nine months. Japanese yen also gained, moving to a 2.5-week high against the dollar, despite a larger-than-expected decline in the Japan Eco Watchers Outlook Survey, which reached a 5.25-year low of 38.7.
Precious metals saw significant gains, with gold increasing by 2.67% and silver by 6.39%. The drop in the dollar and lower global bond yields have supported these prices, amidst a 17% plunge in crude oil, which eases inflation pressures. Despite recent fund liquidations, strong central bank demand, particularly from China’s PBOC, continues to bolster gold prices.
