The dollar index (DXY00) on Wednesday rose by +0.22%. Higher T-note yields Wednesday supported moderate gains in the dollar. The dollar also found support from a decline in the yen Wednesday to a 1-1/4 month low against the dollar.
Wednesday’s Fed Beige Book was neutral to slightly bearish for the dollar. The Fed Beige Book said that "overall economic activity was little changed," with consumer spending generally flat to slightly down in the 12 Fed districts during the month through April 10. Also, "overall price levels rose moderately during this reporting period, though the rate of price increases appeared to be slowing." In addition, "several districts noted that banks tightened lending standards amid increased uncertainty and concerns about liquidity."
EUR/USD (^EURUSD) on Wednesday fell by -0.16%. A stronger dollar on Wednesday weighed on the euro. However, losses in EUR/USD were limited after ECB Chief Economist Lane said the ECB should raise interest rates again next month if the economic backdrop doesn’t shift significantly.
Wednesday’s Eurozone economic news is bullish for EUR/USD after Eurozone Mar new car registrations rose +28.8% y/y to 1.088 million units, the most in 1-3/4 years.
USD/JPY (^USDJPY) on Wednesday rose by +0.46%. The yen Wednesday tumbled to a 1-1/4 month low against the dollar. The yen retreated on speculation the BOJ will maintain its ultra-easy monetary policy after Bloomberg reported that BOJ officials are wary of tweaking or scrapping their yield curve controls at next week’s policy meeting, citing the recent banking turmoil in the U.S. and Europe.
Japan Feb industrial production was revised upward by +0.1 to 4.6% m/m from the initially reported 4.5% m/m, the biggest increase in 8 months.
June gold (GCM3) on Wednesday closed down -12.40 (-0.61%), and May silver (SIK23) closed up +0.108 (+0.43%). Precious metals Wednesday settled mixed, with gold falling to a 2-week low. A stronger dollar on Wednesday undercut metals prices. Also, higher global bond yields Wednesday were bearish for metals. In addition, hawkish comments Wednesday from ECB Chief Economist Lane weighed on metals when he said the ECB should raise interest rates again next month if the economic backdrop doesn’t shift significantly. Silver garnered support Wednesday from the news that showed Eurozone Mar new car registrations rose by the most in 1-3/4 years, a positive factor for industrial metals demand.
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.
