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US Dollar Strengthens as Market Prices in Fewer Fed Rate Cuts
The US Dollar Index surged to its highest level since November 2022, exceeding the 110.00 mark, driven by a shift in market expectations towards fewer, if any, interest rate cuts from the Federal Reserve this year. This shift stems from recent economic data, suggesting a more resilient economy and potentially slower-than-expected inflation decline.
Key Economic Data and Events:
US Producer Prices: This key inflation indicator will be closely watched by market participants for insights into inflationary pressures.
Fed Speakers: Comments from Federal Reserve officials, including Schmid and Williams, will provide further clues on the central bank’s monetary policy outlook.
Eurozone: ECB Executive Board member Lane is scheduled to deliver a speech, which could offer insights into the European Central Bank’s policy stance.
Currencies – Price Action
EUR/USD: The Euro weakened significantly against the US Dollar, extending its bearish trend below the 1.0200 level.
GBP/USD: The British Pound also depreciated against the US Dollar, briefly dipping below the 1.2100 mark before recovering some ground.
USD/JPY: The Japanese Yen strengthened against the US Dollar, marking its third consecutive day of gains.
AUD/USD: The Australian Dollar experienced a modest rebound after four consecutive days of losses, but remained under pressure near the 0.6100 level.
Commodities:
Oil Prices: WTI crude oil prices continued their upward trajectory, surpassing the $78.00 per barrel mark, supported by further US sanctions on Russian oil exports.
Gold and Silver: Gold prices retreated from recent highs, while Silver prices declined sharply, falling below the crucial $30.00 per ounce support level.
