The dollar index (DXY) fell by 0.26% on Tuesday, reaching a six-week low, as easing geopolitical tensions allowed bond yields to drop and the stock market to rally. This movement occurred alongside U.S.-Iran negotiations for a potential extension of a ceasefire set to expire on April 22. Meanwhile, the March Producer Price Index (PPI) showed a weaker-than-expected rise of 0.5% month-over-month and 4.0% year-over-year, against expectations of 1.1% and 4.6%, respectively.
In other market reactions, the euro strengthened by 0.29% against the dollar, supported by a significant decline in crude oil prices, which fell over 7%. The dollar’s weakness also contributed to gains in precious metals, with June COMEX gold rising by $82.70 (1.73%) and May COMEX silver increasing by $3.868 (5.11%). Additionally, the chances for a Federal Reserve rate hike have diminished, with swaps markets pricing in a 1% likelihood of a 25 basis point increase at the upcoming FOMC meeting on April 28-29.
