The dollar index (DXY00) on Thursday rose by +0.01%. The dollar on Thursday gave up an early advance and was little changed. A rebound in stock prices Thursday curbed the liquidity demand for the dollar. Also, signs of weakness in the U.S. labor market knocked the 10-year T-note yield down to a 6-3/4 month low and weighed on the dollar after weekly jobless claims rose more than expected. The dollar found support Thursday on comments from St. Louis Fed President Bullard, who said incoming Q1 economic data is stronger than expected.
Thursday’s weekly U.S. jobless claims report was bearish for the dollar. U.S. weekly initial unemployment claims fell -18,000 to 228,000, showing a weaker labor market than expectations of 200,000. Also, weekly continuing claims rose +6,000 to a 15-month high of 1.823 million, showing a weaker labor market than expectations of 1.700 million.
Thursday's comments from St. Louis Fed President Bullard supported the dollar when he said incoming Q1 economic data is stronger than expected and inflation has declined but remains too high. He added that "financial stress seems to be abated, at least for now, so it's a good moment to continue to fight inflation and try to get on that disinflationary path."
EUR/USD (^EURUSD) on Thursday rose by +0.19%. The euro Thursday recovered early losses and posted moderate gains after German Feb industrial production unexpectedly rose. Also, hawkish comments from ECB Chief Economist Lane were supportive of the euro when he said, "If the baseline we developed before the banking stress holds up, it will be appropriate to raise interest rates again in May."
German Feb industrial production unexpectedly rose +2.0% m/m, stronger than expectations of a decline of -0.1% m/m.
Thursday’s comments from ECB Chief Economist Lane were bullish for EUR/USD when he said, "If the baseline we developed before the banking stress holds up, it will be appropriate to raise interest rates again in May." He added that the Eurozone banking system "is in good shape and that "the European economy is performing relatively well and is expected to grow by around 1% this year."
USD/JPY (^USDJPY) on Thursday rose by +0.40%. The yen Thursday moved moderately lower. Hawkish comments Thursday from St. Louis Fed President Bullard boosted the dollar and weakened the yen. Also, a report Thursday from the IMF pressured the yen as the report warned that the outlook for global economic growth over the next five years is the weakest since 1990.
June gold (GCM3) on Thursday closed down -9.20 (-0.45%), and May silver (SIK23) closed up +0.056 (+0.22%). Precious metals on Thursday settled mixed. A weaker dollar Thursday was bullish for metals. Also, a decline in global bond yields was supportive for metals. However, a rebound in stock prices Thursday curbed the safe-haven demand for precious metals. Also, gains in silver were limited after U.S. weekly jobless claims rose more than expected, a sign of weakness in the labor market that may curb economic growth and industrial metals demand.
