The Dollar Index (DXY00) rose by 0.51% on Thursday, reaching a 3.5-month high, driven by increased liquidity demand due to a slump in U.S. stocks and higher Treasury yields. For the week ending Thursday, U.S. initial unemployment claims fell to 213,000, better than expectations of 215,000. January’s trade deficit narrowed to $54.5 billion, significantly better than the anticipated $66.0 billion, while housing starts unexpectedly rose by 7.2% month-over-month to 1.487 million, surpassing expectations of 1.341 million.
In currency markets, EUR/USD declined by 0.45% amid dollar strength, with Eurozone economic concerns heightened by EU Economy Chief Valdis Dombrovskis’ comments on inflation, projecting it could exceed 3% this year. The USD/JPY increased by 0.30%, as the yen fell to an 8-week low due to surging crude oil prices, impacting Japan’s economy. Market sentiment shows a minimal chance of interest rate hikes from both the Bank of Japan and the European Central Bank in their next meetings.
In the commodities sector, April COMEX gold and May COMEX silver closed lower, with gold down by $53.30 to $1,059.90 amid rising global bond yields and a stronger dollar. Despite a decline, safe-haven demand fueled by geopolitical tensions and strong central bank accumulation continues to provide support for precious metals. Gold reserves held by China’s PBOC rose by 40,000 ounces to 74.19 million troy ounces in January, marking the fifteenth consecutive month of increases.
