Dollar Moves Lower On Strength In Stocks And The Yen
The dollar index (DXY00) on Monday fell -0.265 (-0.28%). The dollar on Monday fell moderately as strength in stocks curbed liquidity demand for the dollar. Also, strength in the yen weighed on the dollar after USD/JPY fell to a 3-1/2 week low.
EUR/USD (^EURUSD) on Monday climbed +0.0020 (+0.17%). EUR/USD on Monday garnered support on data that showed the Eurozone Nov Sentix investor confidence index unexpectedly rose +1.4 to 18.3, stronger than expectations of a decline to 15.0. Gains in the euro were limited on dovish comments from ECB Chief Economist Lane, who said, "We must not overreact to a temporary rise in inflation," and looking at the medium-term situation, the inflations rate is "still too low."
USD/JPY (^USDJPY) on Monday fell -0.15 (-0.13%). The yen rallied to a 3-1/2 week high against the dollar on optimism that a high pace of Covid vaccinations will allow Japan to end pandemic restrictions and fully open its economy. Government data on Monday showed Japan has now vaccinated 73.7% of its total adult population.
Comments on Monday from Fed Vice Chair Clarida were hawkish for Fed policy and supportive for the dollar when he said he didn't anticipate the depth and breadth of the global supply shock and that "he sees the risk to the outlook for inflation to the upside."
December gold (GCZ21) on Monday closed up +11.20 (+0.62%), and Dec silver (SIZ21) closed up +0.385 (+1.59%). Gold and silver on Monday settled moderately higher, with gold at a 2-month high and silver at a 1-1/2 week high. A weaker dollar on Monday supported gains in precious metals. Gold prices also rose on increased demand as a hedge against inflation after Fed Vice Chair Clarida on Monday said that "he sees the risk to the outlook for inflation to the upside." Higher T-note yields on Monday limited gains in gold.
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. The pandemic in the U.S. has worsened slightly after the 7-day average of new U.S. Covid infections rose to a 3-week high last Wednesday of 78,398.
Dollar Moves Lower On Strength In Stocks And The Yen (barchart.com)
