Dollar index dipped significantly yesterday as markets bet the Federal Reserve will be less aggressive in raising interest rates to curb inflation after U.S. authorities stepped in to limit the fallout from the sudden collapse of Silicon Valley Bank.
President Joe Biden said the administration’s swift actions on Sunday to ensure depositors can access their funds in SVB and Signature Bank (NASDAQ:SBNY) should give Americans confidence that the U.S. banking system was safe.
Dollar index down by 1.05%, it was biggest intraday fall since 1 February 2023. Drastic fall in dollar resulted in an abrupt bullish rally in bullions and base metals prices. Where, Gold jumped more than 2.64% and Silver sparked more than 5.49%, biggest single day gain after 1 December 2023.
Base metals recovered slightly following to the above factor. Copper prices gain 1.06%, Aluminum up by 0.86% and Zinc Prices settled up nearly 0.90%.
Crude oil had a negative to volatile trade as the collapse of Silicon Valley Bank hit equities markets and raised fears of a fresh financial crisis, but a recovery in Chinese demand provided support. Oil prices fall more than 2.10%, it dropped towards 5965, lowest levels since 5 January 2023.
Today Economic data and events
UK Data
At 12.30PM- Claimant Count Change, previous was at -12.9, forecast is at 12.5.
At 12.30PM- Average Earnings Index 3m/y, previous was at 5.9%, forecast is at 5.7%.
At 12.30PM – Unemployment Rate, previous was at 3.7%, forecast is slightly higher at 3.8%.
Above data is expected to have a negative impact on Pound and base metals.
Eurozone data
At 2.30pm- Italian Industrial Production m/m, previous was at 1.6%, forecast is -0.3%.
All day- ECOFIN Meetings
Above the data is expected to have a neutral impact on Euro.
Canada Data
At 6.00am- Manufacturing Sales m/m, previous was at -1.5%, forecast is at -0.4%.
Above data is expected to have a negative impact on dollar.
U.S. Data
At 6.pm- CPI m/m, previous data was 0.5%, forecast 0.4%.
At 6.pm – CPI y/y, previous was at 6.4%, forecast is at 6.0%.
At 6.pm Core CPI m/m, previous was at 0.4%, forecast is unchanged at 0.4%.
All above data and events may have volatile impact on dollar and bullions.
From the domestic Front
Wholesale price index (WPI) inflation figure for February 2023 will be release. Data is foreseen at 4.0%, from previous reading of 4.73%.
Exports, imports and trade balance figures at 5.30 pm due to release.
Both data expect to have a strong impact on Rupee.