US Dollar weakens more than half percent yesterday which sparked Bullion prices to their multi –week high. Currency drop significantly as softer-than-expected U.S. inflation data spurred bets on an early rate-hike pause by the Federal Reserve, while growing fears of a recession also supported safe haven buying.
Fed meeting minutes showed that policymakers were considering a pause in rate hikes. But they were also wary of a “mild recession” later this year, in the wake of a banking crisis and as rising interest rates chip away at economic growth.
According to data from the Bureau of Labor Statistics on Wednesday, the consumer price index for the month dipped to 5.0% from 6.0% in February on an annual basis. Economists had projected that the reading would fall to 5.2%.
It was the smallest 12-month increase since the period ending in May 2021, yet still higher than the Fed’s 2% target.
The figure inched down to 0.1% from 0.4% month-on-month, below estimates for growth of 0.2%, with the BLS noting that an uptick in housing rents more than offset a decline in energy prices in March.
Dollar index was last down 0.63% against a basket of currencies at 101.513. The euro up 0.78% to $1.0996
Bullion prices settled in a green following the weakness in the dollar. Gold prices rose by 0.20% to 60628, it made a day’s high of 61070. Silver prices jumped above one year high before closing at 75751, up by 1.16%.
Base metals had a positive trade, copper settled with 0.96% gains. Aluminum up by 0.49% ,Lead up by 1.08% and ZINC up 0.47%.
Crude oil extended its gain for a second day on Wednesday as cooling U.S. inflation data spurred hopes that the Federal Reserve is getting closer to ending its cycle of interest rate hikes and cushioned the impact of a small build in U.S. crude oil stocks.
Important Economic Data and Events
China
Tentative – Trade Balance. Forecast is to be lower by 275B from 810B.
Tentative – USD-Denominated Trade Balance. Forecast is to have contraction by 40.0B from 116.9B
Both data expect to have a negative impact on Yuan and base Metals.
Europe
At 11.30amm – German Final CPI m/m. Data foreseen at 0.8%, unchanged from previous.
At 1.30pm – Italian Industrial Production m/m. Data foreseen at 0.5% higher from contraction of -0.7%.
At 2.30 pm – Industrial Production m/m. Data foreseen at 0.9% higher from previous 0.7%.
At 5.15pm – German Buba President Nagel Speaks.
At 11.30pm – German Buba President Nagel Speaks.
All above data could have a volatile to positive impact on Euro.
U.K.
At 11.30am – GDP m/m. Forecast is to have contraction by 0.1% from 0.3% previous month.
Construction Output m/m, foreseen at 0.9% higher from -1.7% previous month.
Goods Trade Balance, foreseen at -16.9B recover from -17.9B.
Industrial Production m/m, foreseen at 0.2% higher from -0.3% previous month.
Manufacturing Production m/m, foreseen at 0.2% from -0.4% previous month.
At 6.30pm – MPC Member Pill Speaks
All data could have a positive impact on the pound.
CANADA
At 6.30pm – BOC Gov Macklem Speak will have a volatile impact on dollar.
US
At 6.00am – Core PPI m/m. Forecast is to have expanded by 0.2% from 0.0%.
PPI m/m, foreseen at 0.0% compared to contraction of -0.1% in previous month.
Unemployment Claims, foreseen 233k slightly 228k.
All data could have a positive impact on the dollar and negative for bullion.
At 8.00pm – Natural Gas Storage. Forecast is 25B from -23B
2 Day -G20 Meetings
4 Day – IMF Meetings