The dollar index (DXY00) on Friday fell by -0.17%. The dollar on Friday fell back from a 2-month high and posted moderate losses. Lower T-note yields on Friday weighed on the dollar. Also, strength in the yen undercut the dollar after core Japanese consumer prices last month rose at their fastest pace in 42 years. Losses in the dollar were limited as losses in global equity markets boosted the liquidity demand for the dollar.
EUR/USD (^EURUSD) on Friday rose by +0.03%. The euro Friday recovered from a 6-week low and moved slightly higher as weakness in the dollar sparked short covering in the euro. EUR/USD on Friday initially moved lower on a decline in European government bond yields that weakened the euro’s interest rate differentials. Also, Friday’s economic news that showed Eurozone Jun construction output fell by the most in 3 months was bearish for the euro.
Eurozone Jun construction output fell -1.0% m/m, the biggest decline in 3 months.
USD/JPY (^USDJPY) on Friday fell by -0.36%. The yen on Friday strengthened for a second day and posted a 3-session high. Signs of accelerating inflation in Japan are hawkish for BOJ policy and supportive of the yen after Friday’s news showed Japan's Jul national CPI ex-fresh food and energy matched its largest increase in 42 years. Also, the Nikkei Stock Index's slump to a 2-1/2 month low boosted safe-haven demand for the yen. In addition, lower T-note yields Friday were positive for the yen.
Japan July national CPI ex-fresh food and energy rose +4.3% y/y from +4.2% y/y in June and matched May as the largest increase in 42 years.
October gold (GCV3) Friday closed up +1.4 (+0.07%), and Sep silver (SIU23) closed up +0.018 (+0.08%). Precious metals prices Friday closed slightly higher. A weaker dollar on Friday boosted metals prices. Also, a decline in global bond yields was supportive of precious metals. Gains were limited as a recovery in stocks from early losses curbed safe-haven demand for precious metals. Also, ongoing fund liquidation in gold is negative for prices after long gold holdings in ETFs fell to a 3-1/3 year low on Thursday.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
