The dollar index (DXY00) recovered from a 1.5-week low on Wednesday and finished up by +0.08%.  The dollar moved higher after Wednesday's better-than-expected US Jan payroll report pushed T-note yields higher and dampened speculation of additional Fed interest rate cuts.  The chance of a Fed rate cut at next month's FOMC meeting fell to 6% from 23% before the release of Wednesday's monthly payroll report.  Hawkish comments on Wednesday from Kansas City Fed President Jeff Schmid also supported the dollar wh ...

March WTI crude oil (CLH26) on Thursday closed down -1.85 (-2.84%), and March RBOB gasoline (RBH26) closed down -0.0386 (-1.96%). Crude oil and gasoline prices fell sharply on Thursday after the dollar index (DXY00) rallied to a 1.5-week high.  Also, US-Iran tensions eased, weighing on crude prices, after Iran confirmed it would hold talks with the US on Friday.  In addition, today's weaker-than-expected US labor market news was bearish for economic growth prospects and energy demand. More News from Bar ...

The dollar continues to see underlying weakness as the FOMC is expected to cut interest rates by about -50 bp in 2026, while the BOJ is expected to raise rates by another +25 bp in 2026, and the ECB is expected to leave rates unchanged in 2026.The markets are discounting the odds at 12% for a -25 bp rate cut at the next policy meeting on March 17-18.The dollar sank to a 4-year low last Tuesday when President Trump said he’s comfortable with the recent weakness in the dollar. Also, the dollar remains under p ...

Currency Market - The EUR/USD pair fell to a 6-week low, finishing down by -0.08% due to dollar strength, despite initial gains following comments from ECB Chief Economist Philip Lane regarding comfortable monetary policy settings [1] - The dollar is under pressure as the Fed increases liquidity by purchasing $40 billion a month in T-bills, and concerns arise over President Trump's potential appointment of a dovish Fed Chair [2] - The dollar index (DXY) rose by +0.04% after recovering from early losses, supported by stronger-than-expected US manufacturing production and Trump's reluctance to nominate a dovish candidate for Fed Chair [6] Economic Indicators - The US December manufacturing production unexpectedly rose by +0.2% month-over-month, contrary to expectations of a -0.1% decline, with November's production revised upward to +0.3% [4] - The January NAHB housing market index unexpectedly fell by -2 to 37, weaker than the anticipated increase to 40 [3] Japanese Yen Dynamics - The USD/JPY pair fell by -0.35% as the yen strengthened following hawkish comments from Japanese Finance Minister Satsuki Katayama, who indicated readiness for bold action to support the yen [8] - Concerns over the yen's weakness are exacerbated by potential political instability, with reports suggesting a snap election could be called, raising fears of continued expansionary fiscal policy [10] - The yen is also affected by escalating tensions between China and Japan, particularly following China's export controls that could impact Japan's economy [11] Precious Metals Market - February COMEX gold closed down -28.30 (-0.61%), and March COMEX silver closed down -3.810 (-4.12%) due to higher global bond yields and easing geopolitical risks in Iran [12][13] - Demand for precious metals is supported by concerns over the Fed's independence and potential easier monetary policy, as well as ongoing geopolitical risks [16][18] - Strong central bank demand for gold is evident, with China's PBOC increasing its reserves by +30,000 ounces to 74.15 million troy ounces in December, marking the fourteenth consecutive month of increases [19]

The dollar index (DXY00) on Wednesday rose by +0.11%.  The dollar recovered from early losses on Wednesday and moved higher after Dec ISM services index unexpectedly expanded at its fastest pace in 14 months.  The dollar also rose amid increased safe-haven demand after the US seized a Russian-flagged tanker for sanctions violations. The dollar initially moved lower on Wednesday on signs of weakness in the US labor market after the Dec ADP employment report showed private employers added fewer jobs than e ...

Group 1: Oil Price Movements - Crude oil prices closed down by $0.13 (-0.22%), while gasoline prices increased by $0.0053 (+0.31%) on Tuesday [1] - The dollar index reached a one-week high, contributing to the decline in crude prices after an initial advance [2] - The weekly EIA inventory report released on Monday evening was bearish for crude prices, although losses were limited due to ongoing geopolitical risks [2] Group 2: Geopolitical Factors - Persistent geopolitical risks from Venezuela, Nigeria, and Russia are providing some support for crude prices [2] - The U.S. launched strikes on ISIS targets in Nigeria, which is an OPEC member, to combat rising terrorist attacks, further influencing oil prices [4] - The U.S. Coast Guard's blockade of sanctioned oil tankers involved in Venezuelan oil shipments is also supporting oil prices [5] Group 3: OPEC+ and Demand Dynamics - OPEC+ is expected to maintain its plans to pause further supply increases during its upcoming monthly video conference [3] - Chinese crude demand is strengthening, with imports projected to rise by 10% month-over-month to a record 12.2 million barrels per day as the country rebuilds its crude inventories [3] Group 4: Supply Constraints - Ukrainian drone and missile attacks have targeted Russian refineries, limiting Russia's crude oil export capabilities and reducing global oil supplies [7] - New U.S. and EU sanctions on Russian oil companies and infrastructure have further curtailed Russian oil exports [7]

Core Viewpoint - Analysts project that the U.S. dollar will continue to weaken, potentially by 10% by the end of 2026, following a decline initiated by President Trump's tariff plans in April [1][3]. Group 1: Dollar Weakness and Economic Impact - The dollar has weakened by as much as 10% this year against a basket of foreign currencies, currently down 7% year-to-date [1][2]. - A weaker dollar affects travel costs, import prices, and investment returns for U.S. households and investors, reshaping portfolios and global trade dynamics [3]. - The Federal Reserve's ongoing interest rate cuts contribute to the dollar's weakness, making U.S. debt less attractive [7]. Group 2: Global Economic Context - Despite the dollar's decline, global trade and markets still heavily rely on the U.S. dollar, indicating that the narrative of "de-dollarization" is largely overstated [2][9]. - The structural foundation of dollar dominance remains intact, supported by deep and liquid markets and the global reach of U.S. financial institutions [10][11]. - The recent rally in gold prices has led to discussions about de-dollarization, but central banks' gold accumulation has not significantly reduced their dollar holdings [12][13]. Group 3: Investor Sentiment and Hedging - Some investors remain cautious about further dollar weakness, which could erode the value of U.S. dollar assets in their portfolios [14]. - The Fed's rate cuts are making it cheaper for investors to buy instruments that hedge against dollar risks, indicating a potential shift in investment strategies [16]. - Analysts are closely monitoring hedging decisions, with indications that the outlook for hedging flows is leaning bearish on the dollar [17].

Economic Indicators - The dollar index (DXY00) increased by +0.20% due to short covering ahead of the FOMC meeting, with the dollar gaining after October JOLTS job openings unexpectedly rose to a 5-month high of 7.670 million, indicating a stronger labor market than the expected decline to 7.117 million [1][3] - The markets are pricing in a 90% chance that the FOMC will cut the federal funds target range by 25 basis points at the conclusion of the upcoming FOMC meeting [3] Currency Movements - The euro (EUR/USD) decreased by -0.11% amid the dollar's strength and weaker-than-expected German trade news, with German October exports rising by +0.1% month-over-month, below the expected +0.2%, and imports falling by -1.2% month-over-month, worse than the anticipated -0.5% [4][5] - The yen (USD/JPY) rose by +0.53%, reaching a 2-week low against the dollar, pressured by comments from BOJ Governor Ueda regarding the pace of increase in long-term Japanese bond yields and the potential for increased bond buying by the BOJ [6]

Core Insights - Gold prices experienced a decline on Monday, attributed to a stronger dollar against a basket of major currencies [1] - Silver prices also saw a slight decrease, influenced by the strengthening dollar which negatively impacted market sentiment [1] Group 1 - The strengthening of the dollar is a key factor affecting gold prices [1] - The decline in silver prices is also linked to the dollar's performance [1]

Core Viewpoint - Gold prices remained largely unchanged despite a strengthening dollar against major currencies, indicating a level of resilience in the gold market [1] Price Movement - Gold prices experienced a decline of 1% earlier on Thursday but managed to recover somewhat later in the day [1]