The dollar index surged to a 1.5-week high, rising by 0.12% on October 10, 2023, amid increased liquidity demand due to a stock selloff and hawkish comments from Fed Governor Lisa Cook on inflation risks. However, the dollar faced downward pressure from weak labor market data, including a 117.8% year-on-year increase in January job cuts to 108,435, the largest for January since 2009, and an unexpected rise in weekly jobless claims to 231,000, an 8-week high.
In tandem, December JOLTS job openings fell by 386,000 to 6.542 million, marking a 5.25-year low. Markets are currently pricing in a 19% chance of a 25 basis point rate cut at the upcoming Federal Open Market Committee meeting on March 17-18, 2024. Conversely, the euro dipped by 0.03% after Eurozone retail sales fell by 0.8% month-on-month, while German factory orders climbed unexpectedly by 7.8% month-on-month.
Precious metals faced declines, with April COMEX gold down by 2.01% and March COMEX silver falling by 12.61%, attributed to a stronger dollar and reduced interest from central banks and investors in light of recent economic developments. Central bank gold reserves in China reportedly rose by 30,000 ounces to 74.15 million troy ounces in December, highlighting ongoing strong demand in the gold market.
