The dollar index (DXY00) on Tuesday fell by -0.41%. The dollar retreated Tuesday for a second day as an easing of banking-sector contagion reduced the liquidity demand for the dollar. However, the dollar saw support from weakness in stocks Tuesday.
Tuesday’s U.S. economic data was mixed for the dollar. On the negative side, Feb wholesale inventories unexpectedly rose +0.2% m/m versus expectations of a -0.2% m/m decline. Conversely, the Conference Board’s March U.S. consumer confidence index unexpectedly rose +0.8 to 104.2, stronger than expectations of a drop to 101.0. Also, the Mar Richmond Fed manufacturing survey rose +11 to -5, stronger than expectations of -10.
EUR/USD (^EURUSD) on Tuesday rose by +0.44%. The euro rose Tuesday on hawkish ECB comments and better-than-expected Eurozone economic news.
ECB Governing Council member Muller said, "with inflation risks still skewed to the upside, there's probably room to raise interest rates."
Italy’s March consumer confidence index unexpectedly rose +1.1 to a 13-month high of 105.1, stronger than expectations of no change at 104.0.
USD/JPY (^USDJPY) on Tuesday fell by -0.60%. The yen moved higher Tuesday after Japan's cabinet approved the use of 2.2 trillion yen of reserve funds from the fiscal 2022 budget for measures to cushion the impact of inflation. The yen is also climbing as Japanese companies repatriate yen ahead of their fiscal-year end at the end of March.
April gold (GCJ3) on Tuesday closed up +19.70 (+1.01%), and May silver (SIK23) closed up +0.275 (+1.19%). Precious metals on Tuesday closed moderately higher. Dollar weakness Tuesday was bullish for metals prices. Also, a slide in stocks Tuesday boosted some safe-haven demand for precious metals. In addition, the recent banking turmoil has sparked fund buying of gold as gold holdings in exchange-traded funds (ETFs) rose to a 6-week high last Friday. However, higher global bond yields Tuesday limited gains in metals prices.
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.
