The dollar index (DXY00) on Tuesday fell by -0.51% and posted a 2-month low. A decline in T-note yields Tuesday undercut the dollar. Losses in the dollar accelerated Tuesday after U.S. economic reports on Feb JOLTS job openings and Feb factory orders were weaker than expected, signaling a slowdown in the economy.
Tuesday’s U.S. economic data was bearish for the dollar. The Feb JOLTS job openings fell -632,000 to a 1-3/4 year low of 9.931 million, showing a weaker labor market than expectations of 10.500 million. Also, Feb factory orders fell -0.7% m/m, weaker than expectations of -0.5% m/m.
EUR/USD (^EURUSD) on Tuesday rose by +0.49% and climbed to a 2-month high. The euro Monday recovered from a 1-week low and moved moderately higher. A decline in the dollar to a 2-month low Tuesday supported gains in the euro. Also, signs of strength in Germany’s economy were bullish for EUR/USD after German Feb exports posted their biggest increase in 10 months. On the negative side, the ECB reported that consumer inflation expectations fell in February for a second month, a dovish factor for ECB policy.
Eurozone Feb PPI eased to +13.2% y/y from +15.1% y/y in Jan, better than expectations of +13.3% y/y and the slowest pace of increase in 19 months.
German Feb exports rose +4.0% m/m, stronger than expectations of +1.8% m/m and the largest increase in 10 months.
The ECB reported that consumer inflation expectations eased for the second month in Feb, with 12-month inflation expectations easing to 4.6% from 4.9% in Jan and 3-year inflation expectations in Feb easing to 2.4% from 2.5% in Jan.
USD/JPY (^USDJPY) on Tuesday fell by -0.60%. The yen moved higher Tuesday on weakness in the dollar and a decline in T-note yields. Also, a rally in the Nikkei Stock Index Tuesday to a 3-week high curbed safe-haven demand for the yen.
June gold (GCM3) on Tuesday closed up +37.80 (+1.89%), and May silver (SIK23) closed up +1.080 (+4.50%). Precious metals on Tuesday rallied sharply, with gold posting a 1-year high and silver climbing to a 2-month high. Tuesday's decline in the dollar index to a 2-month low was bullish for metals. Also, the fall in the 10-year T-note yield to a 1-week low was supportive for metals. In addition, metals prices rallied after Tuesday’s economic news showed U.S. Feb JOLTS job openings and Feb factory orders fell more than expected, which may prompt the Fed to keep from further raising interest rates.
