The dollar index (DXY00) on Friday fell to -0.41%. The dollar was under pressure after Friday’s report on the PCE CORE Price Index of August, the Fed’s favorite inflation indicator, entered the expectations correctly, which can allow the Fed to continue relaxing monetary policy. The dollar extended its losses on Friday after the September consumption feelings of the University of Michigan was reviewed unexpectedly lower than a minimum of four months.
The losses in the dollar were limited since Friday’s most anticipated reports on AUG’s personal spending and income shows the economic strength that the dollar supports. In addition, the aggressive comments on Friday of the president of Richmond Fed, Tom Barkin, were optimistic for the dollar, since he declared that the uncertainty that permeated the economic perspectives at the beginning of the year has begun to lift for US companies.
US AUG’s personal spending increased by +0.6% m/m, stronger than expectations of +0.5% m/my the greatest increase in 5 months. Aug’s personal income increased +0.4% m/m, stronger than expectations of +0.3% m/m.
The US PCE Price Index of the USA. UU., The Fed Preferred Inflation Meter, increased +0.2% m/my +2.9% A/A, right in expectations.
The feelings of the SEP consumer feelings of the University of Michigan was unexpectedly checked lower than a minimum of 4 months of 55.1, weaker than the expectations of any change in 55.4.
The 1 year inflation expectations of 1 year at the SEP of the University of Michigan were checked lower to 4.7% from the 4.8% previously reported. In addition, inflation expectations of 5 to 10 years of September were checked down to 3.7% from the 3.9% previously reported.
Richmond’s president Tom Barkin said the uncertainty that permeated economic perspectives at the beginning of the year has begun to rise for US companies, and sees a limited risk of greater deterioration in employment and inflation.
The markets have a price at a 90% probability of a -25 BP rate cut at the next FOMC meeting from October 28 to 29.
EUR/USD (^Eurusd) on Friday increased by +0.32%. The weakest dollar on Friday supported the euro. In addition, BCE’s monthly report on inflation expectations was stronger than expected, aggressive for ECB and upward policy for the euro.
The euro also has the support of the divergence of the Central Bank, since the markets consider that the ECB is largely finished with its rate cutting cycle, while the Fed is expected to reduce the rates approximately twice more for the end of this year.
The expectations of the CPI 1 year of August on August unexpectedly increased to 2.8% of 2.6% in July, stronger than the expectations of a 2.5% decrease. IPC expectations of 3 years in August of August did not change from July to 2.5%, stronger than expectations of a 2.4%decrease.
Swaps have a price in a 1% probability of a rate of -25 BP rate for the ECB at the October 30 policy meeting.
USD/JPY (^usdjpy) on Friday fell into -0.20%. The Yen recovered from a minimum of 1.75 months against the dollar on Friday and rose as the dollar weakened in an expected US inflation report. The Yen was initially reduced on Friday after Japan’s Tokyo SEP CPI increased less than expected, a stick factor for Boj’s policy.
The Japan SEP CPI did not change from Aug to AUG to +2.5% A/A, weaker than the expectations of an increase to +2.8% a/a. SEP TOKIO CPI EX-FRESH Food and Energy fell to +2.5% and/and from +3.0% and/and in AGG, weaker than the expectations of +2.9% and/a.
December gold (GCZ25) on Friday closed +37.90 ( +1.01%), and December silver (SIZ25) closed +1.542 ( +3.42%). The prices of precious metals were abruptly recovered on Friday, with Dec Silver by publishing a high and closer contract (U25) registering a maximum of 14 years.
Precious metals settled very high on Friday due to a weaker dollar. In addition, Friday’s Benign Inflation Report on the prices of AUG CORE PCE. Silver prices also obtained the support of the AUG AUG Personal Expenditure Report on Friday, a positive factor for economic growth and demand for industrial metals.
Precious metals continue to receive safe support due to uncertainty linked to US tariffs, a possible closure of the United States government next week and the prospects for the FED to reduce interest rates of another 50 BP this year. In addition, President Trump’s attacks against Fed Independence are increasing the demand for gold, since he tries to say goodbye to Fed Cook governor. In addition, Stephen’s intention looks at being a governor of the Fed, while technically has his work of the White House in the Council of Economic Advisors contributes to this uncertainty. Finally, geopolitical risks and global commercial tensions have increased safe demand for precious metals.
The aggressive comments of the Friday of the president of the Fed of Richmond, Tom Barkin, were bassists for gold, since he declared that he sees a limited risk of a greater deterioration of employment and inflation. In addition, today’s rally has stopped a safe demand for precious metals.
The prices of precious metals continue to receive support for the purchase of ETF funds of precious metals. Gold holdings in ETFs rose to a maximum of almost 3 years on Thursday, and the Silver Holdings in ETFs rose to a maximum of 3 years on Wednesday.
On the date of publication, Rich Asplund had no positions (directly or indirectly) in any of the values ​​mentioned in this article. All information and data in this article are only for informative purposes. This article was originally published at Barchart.com
