The dollar rose more than half a per cent as investors scaled back bets on a March interest rate cut in the US. On Tuesday, Federal Reserve Governor Christopher Waller indicated the central bank may not cut rates as aggressively as the market expects, while the pound and yen fell as inflationary pressure eased.
Euros fell 0.55% to $1.0870, the steepest one-day percentage in two weeks. Comments by European Central Bank officials playing down the idea of an early rate cut cast a shadow over the outlook for borrowing costs around the world.
ECB and Joachim Nagel said on Monday it was too early to talk about cuts, and his Austrian counterpart Robert Holzmann said markets should not bet on lower borrowing costs this year. On Tuesday, other decision makers maintained uncertainty about the timing of the transfers.
Crude oil prices retreated from the day’s high as a stronger U.S. dollar limited demand for greenback-denominated crude, though the rising risks of supply disruptions amid the intensifying conflict in the Red Sea curbed the losses. Prices inched higher in morning trade as heightened tensions in the Middle East fueled concerns that supplies across the key Red Sea region could be disrupted.
Tensions remain high in the Middle East following US and British strikes against Yemen’s Houthi group in retaliation for attacks by the Iranian-backed group in the Red Sea.
That prompted the Houthi movement to announce on Monday that it was expanding its targets in the Red Sea to include US ships.
In addition, Iran announced on Tuesday that it will launch ballistic missiles at targets in Iraq and Syria to defend its sovereignty and fight terrorism. This followed Tehran’s seizure of a Turkish-bound tanker carrying Iraqi oil on Thursday.
Gold remained under pressure as the US dollar and Treasury rose, while investors awaited remarks from several Federal Reserve officials this week to gauge the likelihood that the central bank will cut interest rates this year.
MCX gold futures down 0.85% to 62015. Silver settled down 0.74% at 72093. Copper up 0.01% to 715.50. Crude oil down 0.08% at 6003. Natural gas down 4.47% to 243.7.
Economic data and events scheduled: What’s the Economic Outlook Like today?
China
At 7.30am-
Industrial Production y/y. Data is foreseen at 6.8% from previous 6.6%.
GDP q/y. Data is foreseen at 5.3% from previous 4.9%.
Retail Sales y/y. Data is foreseen at 8.1% from previous 10.1%.
Fixed Asset Investment ytd/y. Data is foreseen at 2.9% from previous 2.9%.
Unemployment Rate. Data is foreseen at 5.0% from previous 5.0%.
NBS Press Conference.
Above data could have a volatile impact on the Chinese Yuan.
UK
At 12.30am-
CPI y/y. Data is foreseen at 3.8% from previous 3.9%.
Core CPI y/y. Data is foreseen at 4.9% from previous 5.1%.
PPI Input m/m. Data is foreseen at -0.6% from pervious -0.3%.
PPI Output m/m. Data is foreseen at -0.2% from previous -0.1%.
At 3.00 pm- HPI y/y. Data is foreseen at -1.9% from previous -1.2%.
Above data could have a volatile impact on the pound.
Eurozone
At 1.15pm- French Gov Budget Balance.
At 3.30pm-
Final Core CPI y/y. Data is foreseen at 3.4% from previous 3.4%.
Final CPI y/y. Data is foreseen at 2.9% from previous 2.9%.
At 8.45pm- ECB President Lagarde Speaks.
All above data could have a neutral impact on the Euro.
CANADA.
At 7.00pm-
IPPI m/m. Data is foreseen at -0.7% from previous -0.4%.
RMPI m/m. Data is foreseen at -2.1% from previous -4.2%.
Above data could have a volatile impact on the Canadian dollar.
US
At 7.00pm-
Core Retail Sales m/m. Data is foreseen at 0.2% from previous 0.2%.
Retail Sales m/m. Data is foreseen at 0.4% from previous 0.3%.
At 7.30pm-
FOMC Member Barr Speaks.
FOMC Member Bowman Speaks.
At 7.45pm-
Industrial Production m/m. Data is foreseen at -0.1% from previous 0.2%.
Capacity Utilization Rate. Data is foreseen at 78.7% from previous 78.8%.
At 8.30pm-
Business Inventories m/m. Data is foreseen at -0.1% from previous was at -0.1%.
NAHB Housing Market Index. Data is foreseen at 39 from previous 37.00 .
Above data could have a volatile impact on the dollar.
Commodity Samachar
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