Got to luv the fed???
Dollar Posts Modest Gains On Higher T-Note YieldsThe dollar index (DXY00) on Monday rose +0.023 (+0.02%). EUR/USD (^EURUSD) rose +0.0010 (+0.09%). USD/JPY (^USDJPY) rose +0.05 (+0.04%). The dollar index on Monday posted modest gains on support from higher T-note yields. The upside in the dollar on Monday was limited by mostly bearish U.S. economic data along with a rally in the S&P 500 to a 1-month high, which reduced the liquidity demand for the dollar.
EUR/USD (^EURUSD) on Monday moved slightly higher on strength in European government bond yields. The upside for the euro was limited by dovish ECB comments. ECB President Lagarde said that "monetary policy will continue supporting the economy in order to durably stabilize inflation at our 2% inflation target over the medium term." Also, ECB Governing Council member Visco said that inflation is largely transitory and ECB monetary policy will remain accommodative.
USD/JPY (^USDJPY) on Monday posted modest gains and is just below last Friday’s 3-year high. The yen was under pressure Monday on higher T-note yield along with higher energy prices in Japan after crude oil prices rallied to a new 7-year high. The yen was still on the defensive from last Friday’s report that said the BOJ at its Oct 28 policy meeting is likely to cut its 2021 Japan GDP growth forecast and also cut its inflation forecast for this year to 0% from 0.6%.
Monday’s U.S. economic data was mostly bearish for the dollar. U.S. Sep manufacturing production unexpectedly fell -0.7% m/m, weaker than expectations of +0.1% m/m and the biggest decline in 7 months. Also, Sep industrial production unexpectedly fell -1.3% m/m, weaker than expectations fo+0.1% m/m and the biggest decline in 7 months. On the positive side, the U.S Oct NAHB housing market index unexpectedly rose +4 to 80, stronger than expectations of a decline to 75.
December gold (GCZ21) on Monday closed down -2.60 (-0.15%), and Dec silver (SIZ21) closed down -0.085 (-0.36%). Precious metals on Monday closed slightly lower. A stronger dollar and higher T-note yields on Monday weighed on metals prices. Also, a rally in the S&P 500 to a 1-month high Monday curbed the safe-haven demand for precious metals.
The dollar and gold have continued safe-haven support from concern the worldwide spread of the delta Covid variant will crimp the global economic recovery. However, the pandemic in the U.S. has improved after the 7-day average of new U.S. Covid infections on Sunday fell to a 2-1/2 month low of 84,798.
Dollar Posts Modest Gains On Higher T-Note Yields (barchart.com)
