US GDP grew 2.6% y/y in the fourth quarter of 2022, down from 3.2% in the third quarter, and missing estimates of 2.7%. 

Dollar fell in European trade against a basket of major rivals with markets considering whether the Federal Reserve will maintain interest rates unchanged at the May meeting. 

Investors now await crucial US data on GDP growth and unemployment claims to gauge the proper pricing for the next policy decision by the Fed. 

The Index

The dollar index fell 0.3% to 102.33, a one-week low, with a session-high at 102.78, after rising 0.2% yesterday, the first profit in three days. 

The Fed

Some analysts expect the Fed to back off its battle with inflation and pause interest rate hikes following the crisis in the banking system.

Currently, markets are pricing in a 57% chance of no change in policies at the May meeting, while pricing for a 0.25% rate hike stands at 43%. 

Growth Data

Later today, US GDP growth is estimated at 2.7% in the fourth quarter, slowing down from 3.2%. 

Unemployment claims are expected up to 196 thousand in the week ending March 25 from 191 thousand in the previous reading. 

Silver prices rallied in European trade to eight-week highs as the dollar lost ground with increasing speculation about a US rate cut later this year, while Chinese demand continues to improve. 

The gains came amid positive outlook for a stronger advance towards the pivotal resistance of $24.50 an ounce amid increasing retail demand. 

Silver Prices

Silver prices rose 1.8% to $23.75 an ounce, the highest since February 2, after rising 0.1% yesterday, the second profit in a row. 

The Greenback

The dollar index fell 0.3% on Thursday, resuming losses and hitting week lows against a basket of major rivals, in turn underpinning dollar-denominated commodities. 

The decline comes as investments in the greenback slow down with risk appetite rebounding while investors seek fresh opportunities with better investing yield. 

Now investors await crucial US growth and unemployment claims data later today to decide the path forward for the dollar. 

The Fed

After the recent US banking crisis, markets are leaning towards a potential Fed rate cut later this year, which will be bolstered if inflation data showed further slowdown.

Markets now view the US economy as in real danger of a steep recession, in turn underpinning safe havens such as precious metals. 

Chinese Demand

Recent Chinese data showed strong recovery after ending the zero tolerance Covid 19 policies and reopening the economy, in turn boosting demand on metals. 

Index Funds

Amid uncertainty, demand climbs on funds based on precious metals such as silver, which is happening now amidst  the global banking crisis.

Purchases in such funds spur demand on actual silver to cover such increases in fund shares. 

Estimstes

We here expect silver to continue moving in the positive direction towards $24, then the pivotal resistance of $24.5, with a breach sending prices towards $26. 

Euro rose in European trade against dollar for the fourth straight session as concerns about the banking sector in Europe subsided, with markets awaiting the European Central Bank's policies to counter inflationary pressures ahead of important European data. 

The dollar lost ground ahead of crucial US growth data in the fourth quarter of last year, and unemployment claims data, which might reduce pressures on the Federal Reserve. 

EUR/USD rose 0.25% to 1.0869, with a session-high at 1.0824, after rising yesterday, the third profit in a row amid strong demand on stocks in Europe. 

The ECB

Several ECB members said the bank is likely to extend interest rate hikes but by a slower pace to guarantee financial stability in the euro zone. 

ECB member Philip Lan said he doesn't see potential risks of a banking crisis in Europe in the near future, asserting the ongoing troubles are indirect consequences of the US and Swiss banking troubles. 

He believes there's a need to increase interest rates to bring inflation back to targets. 

European Rates

Such remarks bolstered the case for a 0.25% rate hike in upcoming meetings until interest rates are brought to neutral levels. 

Inflation Data

To determine pricing for European rate hikes, investors await important data on European consumer prices for several countries and for the euro zone in whole. 

The Dollar

The dollar index fell 0.2% on Thursday against a basket of major rivals as risk appetite rebounds while banking concerns dissipate. 

Investors await data on US growth and unemployment claims to gauge the path forward for the Federal Reserve's policies.