The dollar index (DXY00) on Wednesday rose by +0.24%. The dollar moved higher after better-than-expected U.S. Sep new home sales pushed T-note yields higher. Also, the weakness in stocks on Wednesday sparked some liquidity demand for the dollar. In addition, ramped-up geopolitical risks in the Middle East boosted safe-haven demand for gold after the Wall Street Journal reported Israel was delaying its ground invasion of Gaza to give the U.S. time to bolster its air defenses in the region.
U.S. Sep new home sales rose +12.3% m/m to a 20-month high of 759,000, stronger than expectations of 680,000.
EUR/USD (^EURUSD) on Wednesday fell by -0.19%. A stronger dollar on Wednesday weighed on the euro. Losses in EUR/USD were limited after the German Oct IFO business climate index rose more than expected. Also, short covering boosted the euro ahead of the results of Thursday’s ECB meeting, where the ECB is expected to pause its rate hiking cycle.
The Eurozone Sep M3 money supply fell -1.2% y/y, a smaller decline than expectations of -1.8% y/y.
The German Oct IFO business climate index rose +1.1 to 86.9, stronger than expectations of 86.0.
USD/JPY (^USDJPY) on Wednesday rose by +0.08%. The yen on Wednesday posted modest losses. A jump in T-note yields Wednesday was bearish for the yen. However, losses in the yen were limited as a slump in stocks Wednesday sparked some haven buying of the yen.
The Japan Aug leading index CI was revised downward by -0.3 to 109.2 from the initially reported 109.5.
December gold (GCZ3) on Wednesday closed +8.80 (+0.44%), and Dec silver (SIZ23) closed -0.109 (-0.47%). Precious metals prices on Wednesday settled mixed, with silver falling to a 1-week low. Dollar strength on Wednesday and higher global bond yields were bearish for precious metals prices. However, gold prices shot higher on increased safe-haven demand after the Wall Street Journal reported that Israel will delay a planned ground offensive against Hama in Gaza while the U.S. bolsters its air defenses in the region. The sell-off in the S&P 500 to a 4-1/2 month low Wednesday also boosted the safe-haven demand for precious metals.
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.
