The dollar index (DXY) rose by 0.27% today, supported by an upward spike in oil prices, which have reached the $100 per barrel mark. This development is seen as enhancing the Federal Reserve’s hawkish stance, given that the U.S. is the world’s largest oil producer. In contrast, recent U.S. economic data, including a decline of 92,000 in February payrolls and a 0.2% drop in January retail sales, is weighing on the dollar’s outlook.
The euro (EUR/USD) fell by 0.45%, impacted by the dollar’s strength and the Eurozone’s dependence on imported oil. Swaps markets are pricing only a 1% chance of a rate hike by the European Central Bank at its next meeting on March 19. Meanwhile, the Japanese yen (USD/JPY) increased by 0.39%, also affected by high oil prices which negatively impact Japan’s energy-dependent economy.
April COMEX gold prices dropped by $53.10 (1.02%) amid a stronger dollar and long liquidation, while demand remains bolstered by ongoing geopolitical tensions and stable central bank purchases, particularly by China’s PBOC, which added 40,000 ounces to its reserves in January. Gold ETF holdings have reached a 3.5-year high, underlining continued investor interest, despite recent fluctuations in silver holdings.
