The dollar index rose by 0.29% on Tuesday, reaching a one-week high, driven by stronger-than-expected U.S. retail sales and pending home sales for March. Retail sales increased by 1.7% month-over-month, surpassing expectations of 1.4%, marking the largest gain in a year, while pending home sales rose by 1.5%, exceeding forecasts of 0.5%. Additionally, swaps markets indicate only a 1% chance of a 25 basis point rate hike at the Federal Open Market Committee meeting on April 28-29.
In Europe, the euro fell 0.37% after the German April ZEW survey revealed investor optimism plummeting to a 3.5-year low of -17.2, much worse than the anticipated -5.8. Meanwhile, the yen depreciated by 0.35% amid expectations that the Bank of Japan will maintain interest rates at 0.75% due to ongoing uncertainties, particularly related to the war in Iran.
Precious metals prices dropped significantly, with June COMEX gold declining by 2.26% and May COMEX silver falling by 4.44%. The stronger dollar and rising global bond yields, coupled with robust U.S. economic data, pressured these assets. Furthermore, concerns surrounding U.S.-Iran relations continued to support safe-haven demand for precious metals.
