Latest news with #dollarindex
Globe and Mail
3 days ago
- Business
- Globe and Mail
Dollar Supported by Trade Optimism and Higher Bond Yields
The dollar index (DXY00) today is up by +0.18%. The dollar today is adding to Tuesday's gains on positive carryover from President Trump's action over the past weekend to extend the deadline for a 50% tariff on US importers of EU goods by about 5 weeks to July 9 from June 1. The dollar also has support from higher T-note yields. Gains in the dollar are limited by some negative carryover from last Thursday when the House passed President Trump's tax and spending plan, which would add to the burgeoning US budget deficit. The US May Richmond Fed manufacturing survey rose by +4 to -9, right on expectations. The markets are discounting the chances at 2% for a -25 bp rate cut after the June 17-18 FOMC meeting. EUR/USD (^EURUSD) today is down by -0.11%. Today's dollar strength is undercutting the euro. Also, weaker-than-expected economic news is weighing on the euro after German May unemployment rose more than expected and after German Apr import prices fell more than expected, dovish factors for ECB policy. Losses in the euro are limited after the ECB's Apr 1-year CPI expectations were the highest in 14 months, a hawkish factor for ECB policy. The ECB Apr 1-year CPI expectations indicator of +3.1% y/y was stronger than expectations of +2.8% y/y and the highest in 14 months. The ECB Apr 3-year CPI expectations indicator was unchanged from March at +2.5% y/y, right on expectations. German May unemployment rose by +34,000, higher than expectations of +12,000 and the most in 2-3/4 years. The May unemployment rate was unchanged at 6.3%, right on expectations. The German Apr import price index fell -1.7% m/m, a bigger decline than expectations of -1.4% m/m and the largest drop in more than two years. Swaps are discounting the chances at 98% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) today is up by +0.24%. The yen today added to Tuesday's sharp losses and fell to a 1-week low against the dollar on negative carryover from Tuesday when Bloomberg News reported that Japan's finance ministry sent a questionnaire to market participants regarding appropriate issuance amounts for government bonds, a sign the finance ministry may seek to reduce debt issuance. Also, higher T-note yields today are bearish for the yen. June gold (GCM2 5) today is up +4.10 (+0.12%), and July silver (SIN2 5) is down -0.021 (-0.06%). Precious metals today are mixed on consolidation after Tuesday's sharp losses. Demand for gold as an inflation hedge rose today after the ECB's Apr 1-year CPI expectations indicator of +3.1% y/y was stronger than expectations of +2.8% y/y and the highest in 14 months. In addition, precious metals prices have continued safe-haven support from uncertainty about global trade relations and geopolitical tensions in Ukraine and the Middle East. Bearish factors for precious metals include today's stronger dollar and higher global bond yields. Silver prices are also under pressure on concern that an escalation of the global trade war would dampen economic activity and demand for industrial metals.
Globe and Mail
3 days ago
- Business
- Globe and Mail
Dollar Climbs and Gold Retreats on Trade Optimism
The dollar index (DXY00) Tuesday rose by +0.59%. The dollar moved higher Tuesday after President Trump over the weekend extended the deadline for a 50% tariff on US importers of EU goods by about 5 weeks to July 9 from June 1. The dollar also garnered support from hawkish comments Tuesday by Minneapolis Fed President Kashkari, who said he favors 'maintaining the fed funds rate at current levels.' The dollar extended its gains after the Conference Board's US May consumer confidence index rose more than expected to a 3-month high. Gains in the dollar were limited Tuesday after the US Apr capital goods new orders nondefense ex-aircraft and parts fell more than expected. Also, Tuesday's stock rally curbed liquidity demand for the dollar. The dollar still has some negative carryover from last Thursday when the House passed President Trump's tax and spending plan, which would add to the burgeoning US budget deficit. US Apr capital goods new orders nondefense ex-aircraft and parts fell -1.3% m/m, weaker than expectations of -0.2% m/m and the biggest decline in 6 months. The US Mar S&P CoreLogic composite-20 home price index rose +4.07% y/y, weaker than expectations of 4.50% y/y and the smallest increase in 1-2/ years. The Conference Board's US May consumer confidence index rose +12.3 to a 3-month high of 98.0, stronger than expectations of 87.1. The US May Dallas Fed manufacturing survey general business activity index rose +20.5 to -15.3, stronger than expectations of -23.1. Minneapolis Fed President Kashkari said he favors maintaining the fed funds rate at current levels until there is more clarity on the path of tariffs and their impact on prices. The markets are discounting the chances at 6% for a -25 bp rate cut after the June 17-18 FOMC meeting. EUR/USD (^EURUSD) Tuesday fell by -0.46%. Tuesday's rally in the dollar undercut the euro. Losses in the euro were contained following Tuesday's better-than-expected Eurozone economic news, which showed strength in the economy. Additionally, hawkish comments from ECB Governing Council member Holzmann on Tuesday supported the euro since he stated that he doesn't support additional ECB interest rate cuts. The Eurozone May economic confidence indicator rose +1.0 to 94.8, stronger than expectations of 94.1. Eurozone Apr new car registrations rose +1.3% y/y to 925,000 units, the first increase in four months. ECB Governing Council member Holzmann said the ECB moving interest rates 'further south would be more risky than staying where we are and waiting until September.' Swaps are discounting the chances at 98% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) Tuesday rose by +0.99%. The yen on Tuesday retreated from a 4-week high against the dollar and fell sharply after Japanese government bond yields plunged when Bloomberg News reported that Japan's finance ministry sent a questionnaire to market participants regarding appropriate issuance amounts for government bonds, a sign the finance ministry may seek to reduce debt issuance. The yen on Tuesday initially rallied to a 4-week high against the dollar after economic news showed Japan Apr PPI services prices rose more than expected, a hawkish factor for BOJ policy. Also, Tuesday's comments from BOJ Governor Ueda supported the yen when he said the BOJ will continue to tighten monetary policy as long as its objectives are met. In addition, lower T-note yields on Tuesday were bullish for the yen. Japan Apr PPI services prices rose +3.1% y/y, stronger than expectations of +3.0% y/y. BOJ Governor Ueda said, 'We will adjust the degree of monetary easing as needed' to ensure that the BOJ achieves its sustainable price goal if incoming news gives authorities greater confidence that their economic expectations will be met. June gold (GCM2 5) Tuesday closed down -65.40 (-1.94%), and July silver (SIN2 5) closed down -0.298 (-0.89%). Precious metals retreated on Tuesday due to an easing of trade tensions after President Trump extended the deadline on 50% tariffs on EU goods to July 9 from June 1. Also, dollar strength and Tuesday's sharp rally in stocks have curbed safe-haven demand for precious metals. In addition, hawkish central bank comments on Tuesday weighed on precious metals after Minneapolis Fed President Kashkari and ECB Governing Council member Holzmann said they favor keeping interest rates steady, and BOJ Governor Ueda said the BOJ will keep raising interest rates as long as its objectives are met. Weakness in Tuesday's US economic news was a bearish factor for industrial metals demand and silver prices. Apr capital goods new orders nondefense ex-aircraft and parts posted its biggest decline in 6 months, and the Mar S&P CoreLogic composite-20 home price index posted its smallest increase in 1-1/2 years. Lower global bond yields on Tuesday were supportive of precious metals. Also, geopolitical risks in the Middle East continue to support safe-haven demand for precious metals. Silver is also pressured by concern that an escalation of the global trade war would dampen economic activity and demand for industrial metals.
Globe and Mail
3 days ago
- Business
- Globe and Mail
Dollar Gains and Gold Plunges as Trade Tensions Ease
The dollar index (DXY00) today is up by +0.45%. The dollar is climbing today after President Trump over the weekend extended the deadline for a 50% tariff on European Union goods by about 5 weeks to July 9 from June 1. The dollar also garnered support from hawkish comments today by Minneapolis Fed President Kashkari, who said he favors 'maintaining the fed funds rate at current levels.' The dollar extended its gains after the Conference Board's US May consumer confidence index rose more than expected to a 3-month high. Gains in the dollar are limited after the US Apr capital goods new orders nondefense ex-aircraft and parts fell more than expected. Also, today's stock rally has curbed liquidity demand for the dollar. The dollar still has some negative carryover from last Thursday when the House passed President Trump's tax and spending plan, which would add to the burgeoning US budget deficit. US Apr capital goods new orders nondefense ex-aircraft and parts fell -1.3% m/m, weaker than expectations of -0.2% m/m and the biggest decline in 6 months. The US Mar S&P CoreLogic composite-20 home price index rose +4.07% y/y, weaker than expectations of 4.50% y/y and the smallest increase in 1-2/ years. The Conference Board's US May consumer confidence index rose +12.3 to a 3-month high of 98.0, stronger than expectations of 87.1. Minneapolis Fed President Kashkari said he favors maintaining the fed funds rate at current levels until there is more clarity on the path of tariffs and their impact on prices. The markets are discounting the chances at 2% for a -25 bp rate cut after the June 17-18 FOMC meeting. EUR/USD (^EURUSD) today is down by -0.27%. Today's rally in the dollar is undercutting the euro. Losses in the euro are contained following today's better-than-expected Eurozone economic news, which showed strength in the economy. Additionally, hawkish comments from ECB Governing Council member Holzmann today supported the euro since he stated that he doesn't support additional ECB interest rate cuts. The Eurozone May economic confidence indicator rose +1.0 to 94.8, stronger than expectations of 94.1. Eurozone Apr new car registrations rose +1.3% y/y to 925,000 units, the first increase in four months. ECB Governing Council member Holzmann said the ECB moving interest rates 'further south would be more risky than staying where we are and waiting until September.' Swaps are discounting the chances at 97% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) today is up by +1.06%. The yen today retreated from a 4-week high against the dollar after Japanese government bond yields plunged when Bloomberg News reported that Japan's finance ministry sent a questionnaire to market participants regarding appropriate issuance amounts for government bonds, a sign the finance ministry may seek to reduce debt issuance. The yen today initially rallied to a 4-week high against the dollar after economic news showed Japan Apr PPI services prices rose more than expected, a hawkish factor for BOJ policy. Also, today's comments from BOJ Governor Ueda supported the yen when he said the BOJ will continue to tighten monetary policy as long as its objectives are met. In addition, lower T-note yields today are supportive of the yen. Japan Apr PPI services prices rose +3.1% y/y, stronger than expectations of +3.0% y/y. BOJ Governor Ueda said, 'We will adjust the degree of monetary easing as needed' to ensure that the BOJ achieves its sustainable price goal if incoming news gives authorities greater confidence that their economic expectations will be met. June gold (GCM2 5) today is down -69.60 (-2.07%), and July silver (SIN2 5) is down -0.389 (-1.16%). Precious metals today are sharply lower on an easing of trade tensions after President Trump extended the deadline on 50% tariffs on EU goods to July 9 from June 1. Also, dollar strength and today's sharp rally in stocks have curbed safe-haven demand for precious metals. In addition, hawkish central bank comments today are weighing on precious metals after Minneapolis Fed President Kashkari and ECB Governing Council member Holzmann said they favor keeping interest rates steady, and BOJ Governor Ueda said the BOJ will keep raising interest rates as long as its objectives are met. Weakness in today's US economic news is a bearish factor for industrial metals demand and silver prices. Apr capital goods new orders nondefense ex-aircraft and parts posted its biggest decline in 6 months, and the Mar S&P CoreLogic composite-20 home price index posted its smallest increase in 1-1/2 years. Lower global bond yields today are supportive of precious metals. Also, geopolitical risks in the Middle East continue to support safe-haven demand for precious metals. Gains in silver were limited by concern that an escalation of the global trade war would dampen economic activity and demand for industrial metals.
Globe and Mail
23-05-2025
- Business
- Globe and Mail
Dollar Moves Higher on Signs of US Economic Strength
The dollar index (DXY00) Thursday rose by +0.37%. The dollar moved higher Thursday on signs of strength in the economy after weekly jobless claims fell to a 1-month low and the May S&P manufacturing PMI unexpectedly increased, hawkish factors for Fed policy. However, gains in the dollar are limited after the House on Thursday passed President Trump's tax and spending plan, which will add to the burgeoning US budget deficit. The bill now goes to the Senate for approval. The dollar still has some negative carryover from last Friday when Moody's Ratings downgraded the US government's credit rating from Aaa to Aa1, citing a ballooning budget deficit and fiscal concerns. The downgrade put the dollar's status as a global reserve currency into question and may prompt some investors to lighten up on their dollar assets. Also, dovish comments on Thursday from Fed Governor Waller were negative for the dollar when he said the Fed could cut interest rates the second half of the year if tariffs settle near 10%. US weekly initial unemployment claims unexpectedly fell -2,000 to a 1-month low of 227,000, showing a stronger labor market than expectations of an increase to 230,000. The US May S&P manufacturing PMI unexpectedly rose +1.9 to 52.3 versus expectations of a decline to 49.9. US Apr existing home sales unexpectedly fell -0.5% m/m to a 7-month low of 4.00 million, weaker than expectations of an increase to 4.10 million. Fed Governor Waller said if the Trump administration's tariffs on US trading partners settle around 10% this summer, "then we're in a good position at the Fed to kind of move with rate cuts through the second half of the year." The markets are discounting the chances at 5% for a -25 bp rate cut after the June 17-18 FOMC meeting. EUR/USD (^EURUSD) Thursday fell by -0.42%. Thursday's dollar strength weighed on the euro. The euro also fell on the dovish summary of the ECB's April 16-17 policy meeting, where members signaled a bias toward further monetary easing. In addition, Thursday's monthly report from the Bundesbank was bearish for the euro, as it said that after modest growth in Q1, output in Germany would probably stagnate in Q2. Losses in the euro were limited Thursday after the Eurozone May S&P manufacturing PMI rose more than expected to a 2-3/4 year high. Also, the German May IFO business climate index rose more than expected to an 11-month high. The Eurozone May S&P manufacturing PMI rose +0.4 to a 2-3/4 year high of 49.4, stronger than expectations of 49.2. However, the May S&P composite PMI unexpectedly fell -0.9 to a 6-month low of 49.5, weaker than expectations of an increase to 50.6. The German May IFO business climate index rose +0.6 to an 11-month high of 87.5, stronger than expectations of 87.3. The April 16-17 ECB meeting summary was dovish as policymakers expressed concern about the negative economic impact of US tariffs and signaled a bias toward additional monetary easing. Policymakers also said, "Even with the additional spending on defense and infrastructure, it was likely that, on balance, Eurozone growth would be worse in 2025 than previously expected." In its monthly report, the Bundesbank said that after modest growth in Q1, output would probably stagnate in Q2, citing a "wide range of negative factors" that are compounded by US trade tariffs hitting German exporters. Also, "due to the economic downturn, uncertainty about the future economic development, and lower inflation rates, wage settlements are likely to remain significantly lower than in the past two years." Swaps are discounting the chances at 95% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) Thursday rose by +0.29%. The yen retreated from a 2-week high against the dollar Thursday and turned lower after Treasury Secretary Bessent and Japanese Finance Minister Kato said currency levels weren't discussed in a meeting in Canada. The officials said exchange rates should be determined by the market, which suggests the US has no issue with the yen's level after President Trump earlier accused Japan of taking an unfair advantage by lowering the yen's value. The stabilization of stocks on Thursday also reduced safe-haven demand for the yen. The yen on Thursday initially moved higher on strength in Japanese economic news after Mar core machine orders unexpectedly rose at the fastest pace in 17 years, and the May Jibun Bank manufacturing PMI rose. Also, rising Japanese government bond yields supported the yen after the 10-year JGB bond yield jumped to a 1-3/4 month high Thursday of 1.582%. In addition, hawkish comments on Thursday from BOJ Board member Noguchi boosted the yen when he said the BOJ doesn't need to step into the bond market to take action against a recent spike in long-term bond yields. Japan Mar core machine orders unexpectedly rose +13.0% m/m, stronger than expectations of a decline of -1.6% m/m and the largest increase in 17 years. The Japan May Jibun Bank manufacturing PMI rose +0.3 to 49.0. However, the May Jibun Bank services PMI fell -1.6 to 50.8. BOJ Board member Noguchi said the BOJ doesn't need to step into the bond market to take action against a recent spike in long-term bond yields, as the moves are not necessarily abnormal. June gold (GCM2 5) Thursday closed down -18.50 (-0.56%), and July silver (SIN2 5) closed down -0.427 (-1.27%). Precious metals on Thursday gave up an early advance and turned lower, with gold falling from a 1-1/2 week high and silver falling from a 3-1/2 week high. Thursday's stronger dollar weighed on metals prices. Also, Thursday's stock rebound curbed safe-haven demand for precious metals. Gold prices continue to be undercut by fund liquidation as long gold positions in ETFs fell to a 1-3/4 month low on Wednesday. Precious metals on Thursday initially moved higher on worries about rising US deficits that boosted precious metals as a store of value after the House passed President Trump's tax and spending bill. Dovish comments Thursday from Fed Governor Waller also boosted precious metals when he said the Fed could cut interest rates in the second half of this year if tariff increases settle around 10%. Finally, geopolitical risks in the Middle East continue to support safe-haven demand for precious metals.
Globe and Mail
22-05-2025
- Business
- Globe and Mail
US Deficit Concerns Undercut the Dollar and Boost Gold
The dollar index (DXY00) Wednesday fell by -0.59% and posted a 2-week low. The dollar remains under pressure after Moody's Ratings late last Friday downgraded the US government's credit rating from Aaa to Aa1, citing a ballooning budget deficit and fiscal concerns. The downgrade puts the dollar's status as a global reserve currency into question and may prompt some investors to lighten up on their dollar assets. Also, worries about rising US budget deficits are undercutting the dollar, with legislators discussing a tax-cut package. Higher T-note yields on Wednesday limited losses in the dollar. The markets are discounting the chances at 5% for a -25 bp rate cut after the June 17-18 FOMC meeting. EUR/USD (^EURUSD) Wednesday rose by +0.41% and posted a 2-week high. Wednesday's dollar weakness supported gains in the euro. The euro also moved higher on Wednesday due to hawkish comments from ECB Governing Council member Kazaks, who said ECB interest rate cuts are nearing an end. The ECB, in its bi-annual Financial Stability Review, said the 'atypical shifts' away from traditional havens like the dollar and US Treasuries after April's trade announcements may point to a 'fundamental regime change.' That raises the danger of 'broader shifts in capital flows that could have potentially far-reaching consequences for the global financial system.' ECB Governing Council member Kazaks said ECB interest rate cuts are nearing an end, assuming the base case for inflation stabilizing at 2% over the coming months is realized. Swaps are discounting the chances at 93% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) Wednesday fell by -0.61%. The yen on Wednesday added to this week's rally and posted a 2-week high against the dollar. The yen found support Wednesday from rising Japanese government bond yields after the 10-year JGB bond yield jumped to a 1-3/4 month high of 1.539%. Also, the escalation of geopolitical risks has boosted safe-haven demand for the yen after CNN reported that new US intelligence suggests Israel is preparing for a potential strike on Iranian nuclear facilities. Higher T-note yields on Wednesday limited gains in the yen. Japanese trade news was mixed. Apr exports rose +2.0% y/y, weaker than expectations of +2.5% y/y. Apr imports fell -2.2% y/y, a smaller decline than expectations of -4.2% y/y. June gold (GCM2 5) Wednesday closed up +28.90 (+0.88%), and July silver (SIN2 5) closed up +0.472 (+1.42%). Precious metals on Wednesday settled higher, with gold climbing a 1-1/2 week high and silver posting a 3-week high. Wednesday's fall in the dollar to a 2-week low supports precious metals. Also, escalating geopolitical risks are ramping up safe-haven demand for precious metals after CNN reported that Israel may be planning a strike on Itan's nuclear facilities. In addition, worries about rising US deficits are boosting precious metals as a store of value, with US legislators discussing a tax-cut package. Finally, geopolitical risks in the Middle East continue to support safe-haven demand for precious metals. Israeli Prime Minister Netanyahu announced an 'unprecedented attack' on Hamas and said Israel would take over the entire Gaza Strip. Also, Israel's airstrikes on Houthi rebels in Yemen continue. Higher global bond yields on Wednesday were bearish for precious metals. Also, hawkish comments on Wednesday from ECB Governing Council member Kazaks were bearish for precious metals when he said ECB interest rate cuts are nearing an end. Fund liquidation of long gold positions continues to weigh on prices due to the easing of US-China trade tensions after China and the US recently agreed to reduce tariffs on each other's goods. Long gold positions in ETFs fell to a 6-week low on Tuesday.
