The Eurodollar fell last week to record an almost three-week low. European CPI inflation figures came in slightly lower than expected, increasing the chances that the European Central Bank will cut rates sooner rather than later.
The British pound declined after UK factory data highlighted the seventeenth consecutive month of contraction in a sign that the economy is continuing to underperform.
The USD/Yen pair traded higher to reach its highest level in three weeks. Analysts believe that Japan’s recent earthquake will delay the Bank of Japan’s plans to exit its ultra-easy policy this month.
Gold prices decreased as the dollar climbed, making the precious metal more expensive for foreign currency traders. In the Middle East geopolitical turmoil continues as over a hundred people were killed by an attack in Iran and ships in the Red Sea continued to be targeted by Houthi rebels.
The price of US stocks fell after recording its longest run of gains since January 2004, capping a blockbuster year for stocks. Tech and chip stocks like Facebook and NVIDIA outperformed other sectors last year, but 2023 will be considered a blockbuster year for stocks with prices rising in all major sectors.
Oil prices traded higher as tensions continued to grip the Middle East. The escalating violence in the region increases the possibility that oil tankers or wells may be targeted, which is supporting higher oil prices.