The dollar index (DXY00) on Thursday rose by +0.02%. The dollar Thursday posted modest gains. Higher T-note yields Thursday underpinned the dollar. T-note yields rose Thursday after weekly U.S. initial unemployment claims unexpectedly fell, and the Q1 core PCE deflator rose more than expected. Strength in stocks Thursday curbed liquidity demand for the dollar. The dollar Thursday dipped briefly after Q1 U.S. GDP grew slower than expected.
U.S. weekly initial unemployment claims unexpectedly fell -16,00 to 230,000, showing a stronger labor market than expectations of an increase to 248,000. Likewise, weekly continuing claims unexpectedly fell -3,000 to 1.858 million, showing a stronger labor market than expectations of an increase to 1.870 million.
U.S. Q1 GDP rose +1.1% (q/q annualized), weaker than expectations of +1.9%. Q1 personal consumption rose +3.7%, weaker than expectations of +4.0%. The Q1 core PCE deflator rose +4.9% q/q annualized, stronger than expectations of +4.7%.
U.S. Mar pending home sales unexpectedly fell -5.2% m/m, weaker than expectations of an +0.8% m/m increase and the biggest decline in 6 months.
EUR/USD (^EURUSD) on Thursday fell by -0.14%. The euro Thursday posted modest losses, weighed down by strength in the dollar. Also, Thursday’s economic news that showed Eurozone Apr economic confidence rose less than expected was bearish for the euro.
Eurozone Apr economic confidence rose +0.1 to 99.3, weaker than expectations of 99.9.
USD/JPY (^USDJPY) on Thursday rose by +0.21%. The yen Thursday was under pressure from higher T-note yields. Also, an easing of the U.S. banking turmoil reduced the safe-haven demand for the yen after First Republic Bank climbed more than +11% Thursday after the 2-session plunge. In addition, the yen is being undercut on expectations for the BOJ to maintain its stimulus measures when it concludes its 2-day policy meeting on Friday.
June gold (GCM3) on Thursday closed up +3.00 (+0.15%), and May silver (SIK23) closed up +0.107 (+0.43%). Precious metals Thursday recovered from early losses and closed slightly higher. Gold rebounded from a 1-week low on concern the ongoing U.S. banking turmoil will prompt the Fed to pause its interest rate hiking campaign. The ongoing U.S. banking turmoil has sparked fund buying of gold as a safe haven after gold holdings in exchange-traded funds (ETFs) rose to a 3-1/2 month high Wednesday.
Precious metals Thursday initially moved lower on a stronger dollar and higher global bond yields. Silver was also under early pressure on signs of weakness in industrial metals demand after U.S. Q1 GDP expanded less than expected.
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.
