Dollar strengthens on strength in US manufacturing
dollar index (DXY00) rebounded to a 4-1/2-month high on Monday, ending the day up +0.48%. The dollar initially rose on Monday after the US February consumer spending report, released last Friday, came in better than expected. Also, Fed Chairman Jerome Powell's comments last Friday, saying the Fed was “in no hurry” to cut interest rates, supported the dollar. The dollar extended its gains on Monday after a stronger-than-expected March ISM manufacturing index signaled a more hawkish tone for Fed policy.
The U.S. ISM Manufacturing Business Index for March rose 2.5 points to 50.3, exceeding expectations of 48.3 and marking the highest level in a year and a half. His ISM Prices Paid sub-index rose +3.3 in March to 55.8, the highest in 18 months, beating expectations of 53.0.
U.S. construction spending in February unexpectedly fell by -0.3% month-on-month, instead of the expected increase of +0.7% month-on-month.
The US Personal Consumption Expenditure Report for February, released last Friday, increased by 0.8% month-on-month, exceeding expectations of +0.5% month-on-month and marking the largest increase in 13 months. Personal income rose +0.3% m/m in February, lower than the +0.4% m/m expected.
Last Friday's US February PCE core deflator report, the Fed's recommended inflation measure, fell to +2.8% y/y from +2.9% y/y in January, which is in line with expectations and has been in place for almost three years. This was the smallest increase in the number of yellowtails.
Last Friday, Fed Chairman Jerome Powell said, “The fact that the U.S. economy is growing at such a solid pace, the fact that the labor market remains very, very strong, gives us an opportunity to be a little more confident about inflation.'' Stated. It will likely be lowered before taking the important step of lowering interest rates. ”
The market is discounting the possibility of a -25 basis point rate cut of 7% at the next FOMC meeting on April 30th-May 1st, and 60% chance of a -25 basis point rate cut at the next FOMC meeting on June 11th-12th.
EUR/USD (^Eurodollar) fell to its lowest in a month and a half on Monday, ending the day down -0.44%. Monday's strength in the dollar weighed on the euro. Trading activity in the euro was below average on Monday as markets in the euro area were closed for the Easter Monday holiday.
The swaps factor in the possibility that the ECB will cut interest rates by 10% at its next meeting on April 11th and by 97% at its next meeting on June 6th by -25 basis points.
USD/JPY (^USD Yen) rose +0.20% on Monday. The yen recorded a modest decline on Monday, coming under pressure from rising T-note yields. However, the yen's loss was limited because the 1Q Large Enterprise Tankan Business Conditions Index exceeded expectations. Japanese authorities are also moving closer to intervening in currency markets to support the yen, after Japanese Finance Minister Suzuki reiterated on Monday that the Japanese government would take appropriate measures against excessive currency fluctuations. The yen also gained support from speculation that there may be.
Japan's first quarter Tankan Large Enterprise Manufacturing Business Index fell to 11 from 12 in the fourth quarter, higher than the expected 10.
The swap is pricing in the possibility of a +10bp rate hike by the Bank of Japan at 0% at its April 26th meeting and 154% at its next June 14th meeting.
Friday of June (GCM4) Monday's closing price was +18.7 (+0.84%), May silver (SIK24) ended at +0.157 (+0.63%). Precious metals recorded a modest rise on Monday, with June gold hitting a contract high and April gold's recent futures price rising to a record high. Silver prices also rose to a one-week high. Last Friday's dovish US February Core PCE deflator, the Fed's preferred inflation measure, saw precious metals rise on Monday, posting their smallest gain in nearly three years. The U.S. March ISM Manufacturing Business Index expanded the most in 18 months, and the Caixin March Manufacturing PMI expanded the most in 13 months, providing positive factors for industrial metals demand. Silver gained support.
Precious metals fell from Monday's all-time highs as the dollar index rose to a 4-1/2-month high. The rise in T-note yields was also negative for gold prices after the 10-year T-note yield rose to its highest level in a week and a half on Monday.
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On the date of publication, rich asplund I had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. Please see the Barchart Disclosure Policy for more information. here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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dollar index (DXY00) rebounded to a 4-1/2-month high on Monday, ending the day up +0.48%. The dollar initially rose on Monday after the US February consumer spending report, released last Friday, came in better than expected. Also, Fed Chairman Jerome Powell's comments last Friday, saying the Fed was “in no hurry” to cut interest rates, supported the dollar. The dollar extended its gains on Monday after a stronger-than-expected March ISM manufacturing index signaled a more hawkish tone for Fed policy. The U.S. ISM Manufacturing Business Index for March rose 2.5 points to 50.3, exceeding expectations of 48.3 and marking the highest level in a year and a half. His ISM Prices Paid sub-index rose +3.3 in March to 55.8, the highest in 18 months, beating expectations of 53.0.
U.S. construction spending in February unexpectedly fell by -0.3% month-on-month, instead of the expected increase of +0.7% month-on-month.The US Personal Consumption Expenditure Report for February, released last Friday, increased by 0.8% month-on-month, exceeding expectations of +0.5% month-on-month and marking the largest increase in 13 months. Personal income rose +0.3% m/m in February, lower than the +0.4% m/m expected.Last Friday's US February PCE core deflator report, the Fed's recommended inflation measure, fell to +2.8% y/y from +2.9% y/y in January, which is in line with expectations and has been in place for almost three years. This was the smallest increase in the number of yellowtails.Last Friday, Fed Chairman Jerome Powell said, “The fact that the U.S. economy is growing at such a solid pace, the fact that the labor market remains very, very strong, gives us an opportunity to be a little more confident about inflation.'' Stated. It will likely be lowered before taking the important step of lowering interest rates. ” The market is discounting the possibility of a -25 basis point rate cut of 7% at the next FOMC meeting on April 30th-May 1st, and 60% chance of a -25 basis point rate cut at the next FOMC meeting on June 11th-12th.
EUR/USD (^Eurodollar) fell to its lowest in a month and a half on Monday, ending the day down -0.44%. Monday's strength in the dollar weighed on the euro. Trading activity in the euro was below average on Monday as markets in the euro area were closed for the Easter Monday holiday. The swaps factor in the possibility that the ECB will cut interest rates by 10% at its next meeting on April 11th and by 97% at its next meeting on June 6th by -25 basis points.USD/JPY (^USD Yen) rose +0.20% on Monday. The yen recorded a modest decline on Monday, coming under pressure from rising T-note yields. However, the yen's loss was limited because the 1Q Large Enterprise Tankan Business Conditions Index exceeded expectations. Japanese authorities are also moving closer to intervening in currency markets to support the yen, after Japanese Finance Minister Suzuki reiterated on Monday that the Japanese government would take appropriate measures against excessive currency fluctuations. The yen also gained support from speculation that there may be.Japan's first quarter Tankan Large Enterprise Manufacturing Business Index fell to 11 from 12 in the fourth quarter, higher than the expected 10.The swap is pricing in the possibility of a +10bp rate hike by the Bank of Japan at 0% at its April 26th meeting and 154% at its next June 14th meeting.
Friday of June (GCM4) Monday's closing price was +18.7 (+0.84%), May silver (SIK24) ended at +0.157 (+0.63%). Precious metals recorded a modest rise on Monday, with June gold hitting a contract high and April gold's recent futures price rising to a record high. Silver prices also rose to a one-week high. Last Friday's dovish US February Core PCE deflator, the Fed's preferred inflation measure, saw precious metals rise on Monday, posting their smallest gain in nearly three years. The U.S. March ISM Manufacturing Business Index expanded the most in 18 months, and the Caixin March Manufacturing PMI expanded the most in 13 months, providing positive factors for industrial metals demand. Silver gained support. Precious metals fell from Monday's all-time highs as the dollar index rose to a 4-1/2-month high. The rise in T-note yields was also negative for gold prices after the 10-year T-note yield rose to its highest level in a week and a half on Monday.
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On the date of publication, rich asplund I had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. Please see the Barchart Disclosure Policy for more information. here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
https://www.nasdaq.com/articles/dollar-rallies-on-us-manufacturing-strength Dollar strengthens on strength in US manufacturing
