The dollar index (DXY00) on Monday rose by +0.15%. The dollar on Monday recovered early losses and posted moderate gains on higher T-note yields.
The Federal Reserve's Senior Loan Officer Opinion Survey reported tighter standards and weaker demand for commercial and industrial loans in Q1, which was bearish for the U.S. economy. The proportion of U.S. banks tightening terms on loans for medium and large businesses rose to 46% from 44.8% in Q4 of 2022. Also, the proportion of banks reporting stronger demand for commercial and industrial loans dropped by -55.6% in Q1, the sharpest decline since 2009.
EUR/USD (^EURUSD) on Monday fell by -0.15%. The euro on Monday gave up an early advance and fell moderately. A rebound in the dollar Monday from early weakness sparked long liquidation in the euro. Also, weaker-than-expected Eurozone economic news on Eurozone May Sentix investor confidence and German Mar industrial production was bearish for the dollar. EUR/USD on Monday initially moved higher on hawkish comments from ECB Governing Council member Knot who said the ECB needs to continue raising interest rates amid a "too high" underlying inflation rate.
The Eurozone May Sentix investor confidence unexpectedly fell -4.4 to a 4-month low of -13.1, weaker than expectations of an increase to -7.5.
German Mar industrial production fell -3.4% m/m, weaker than expectations of -1.5% m/m and the biggest decline in a year.
USD/JPY (^USDJPY) on Monday rose by +0.26%. The yen on Monday was weighed down by rising T-note yields and dollar strength. Also, an easing of U.S. banking concerns sparked a rally in regional bank stocks Monday and curbed safe-haven demand for the yen. Losses in the yen were contained after Monday’s decline in the Nikkei Stock Index to a 1-week low boosted safe-haven demand for the yen.
Monday’s Japanese economic news was supportive for the yen after the Japan Apr Jibun Bank services PMI was revised upward by +0.5 to 55.4 from the initially reported 54.9.
June gold (GCM3) on Monday closed up +8.40 (+0.41%), and July silver (SIN23) closed down -0.096 (-0.37%). Precious metals on Monday settled mixed. The ongoing U.S. banking turmoil has boosted the safe-haven demand for precious metals. However, gains in metals were limited due to a stronger dollar. Also, higher global government bond yields on Monday were bearish for precious metals. Silver prices fell back on industrial metals demand concerns after Eurozone economic news Monday showed German Mar industrial production fell more than expected by the most in a year.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
