US dollar skids to one-week trough
The US dollar fell in European trade on Thursday to a week trough, resuming losses as US 10-year treasury yields stalled before important US data.
The data will provide important clues on the path ahead for US interest rates later this year.
The Index
The dollar index fell 0.4% today to 107.50, a February 5 low, with a session-high at 107.99.
On Wednesday, the index rose 0.1% today after losing 0.4% on Tuesday due to weaker investment demand.
US Yields
US 10-year treasury yields fell 0.5% on Thursday away from a three-week high at 4.660%, and on track for the first loss in six sessions, in turn hurting the dollar.
US Rates
Fed Chair Jerome Powell told Congress on Wednesday that the Fed’s fight with inflation isn’t over yet, and that any more rate cuts will have to wait until inflation is clearly heading towards the 2% target.
US consumer prices rose past estimates in January in another sign of renewed inflationary pressures on the Fed’s policymakers.
According to the Fedwatch tool, the odds of a 0.25% Fed rate cut in March fell from 5% to 2.5%.
Now traders await important US data on producer prices and unemployment claims to gather more clues.
Gold gains ground towards record highs on trade concerns
Gold prices rose in European trade on Thursday and expanded the gains for the second day towards record highs on haven demand, as US President Donald Trump plans more trade tariffs.
Gold’s gains are also boosted by the dollar's decline as investors pull back to monitor the market.
Prices
Gold prices rose 0.65% to $2922 an ounce, with a session-low at $2900.
On Wednesday, gold rose 0.2%, resuming gains and approaching a record high at $2942.
Trump’s Tariffs
President Donald Trump announced plans to impose reciprocal tariffs on any country that imposes tariffs on US imports, triggering concerns about an escalating global trade war.
Such a step will no doubt lead to retaliatory measures from other governments and could damage global sentiment and growth.
US Dollar
The dollar index fell 0.4% on Thursday against a basket of major rivals, underpinning the greenback-denominated commodity futures.
It comes after Trump ordered government officials to commence talks in order to end the war in Ukraine.
US Rates
Fed Chair Jerome Powell told Congress on Wednesday that the Fed’s fight with inflation isn’t over yet, and that any more rate cuts will have to wait until inflation is clearly heading towards the 2% target.
US consumer prices rose past estimates in January in another sign of renewed inflationary pressures on the Fed’s policymakers.
According to the Fedwatch tool, the odds of a 0.25% Fed rate cut in March fell from 5% to 2.5%.
Now traders await important US data on producer prices and unemployment claims to gather more clues.
SPDR
Gold holdings at the SPDR Gold Trust fell 5.44 tons yesterday to a total of 866.50 tons, away from January 17 highs at 871.94 tons.
