Daily digest market movers: Gold price rises while US Dollar corrects
- Gold price keeps rising as geopolitical tensions strengthen the safe-haven bid and the US Dollar corrects from fresh four-month highs. Rising geopolitical tensions lead investors towards safe-haven assets such as Gold.
- In the eastern part of Europe, continuous drone attacks from Ukraine on Russian Oil refineries have resulted in a fresh escalation in the Moscow-Kyiv tensions. US President Joe Biden criticized the event of Ukraine targeting Russia’s Oil infrastructure as it could have drastic consequences for global Oil prices.
- In the Middle East, Iran vows to retaliate on the deaths of their high-ranking commanders in an attack at the Iranian embassy in Damascus by the Israeli army. This has deepened fears of Iran’s direct entry into Israel-Palestine tensions. Moreover, the killing of seven aid workers in Gaza on Tuesday after an Israeli attack has also raised tensions between Israel and some of its main allies in the West.
- Meanwhile, the US Dollar Index (DXY) corrects to 104.70 from a four-month high at 105.10 even though Federal Reserve policymakers seem to be leaning towards delaying interest-rate cuts until later than June.
- Cleveland Fed Bank President Loretta Mester and San Francisco Fed Bank President Mary Daly spoke on Tuesday. They both suggested that the Fed sees more risk in cutting interest rates too early. Fed Mester added: “With labor markets and economic growth both being very solid, we do not need to take that risk.” Both policymakers see three rate cuts as “reasonable” this year.
- In Wednesday’s session, investors will focus on Fed Chairman Jerome Powell’s speech and the economic data such as ADP Employment Change and the ISM Services PMI data for March. Powell is expected to provide cues about when the central bank will pivot to rate cuts.
- US private employers are anticipated to have hired 148K job-seekers, slightly higher from 140K payrolls in February. The ISM is expected to report that the Services PMI rose marginally to 52.7 from 52.6 in February.
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