The dollar gained against most major currencies in the past two sessions, with the dollar index (USDX) reaching 103.46, a level last seen early in December. The move came following robust U.S. retail sales data that raised expectations that the Federal Reserve will not rush to lower interest rates.
According to the CME FedWatch Tool, the possibility for a rate cut in the March FOMC meeting fell from levels of 69% currently at 59.5% while the possibility for an additional rate cut taking place in May is at 49.9% from 65.7% seen earlier this week.
Gold prices fell sharply on Wednesday following U.S. retail data indicating a resilient economy thus increasing doubts over early interest rate cuts by the Federal Reserve. The yellow metal wiped out a major part of the gains seen in December, trading 2.59% lower so far this month, hovering near the $2,000 per ounce support level.
The main US stock market indices all ended Wednesday’s session in negative territory, despite gains in the main tech names, including Apple (AAPL), Meta (META) , and Nvidia (NVDA). According to reports, only about 25% of the Nasdaq 100 stocks closed with gains while most stocks of small market capitalization lagged behind once again as expectations for a possible rate cut were pushed back.
Energy prices edged higher on Wednesday, despite recent gains in the dollar, as supply disruption concerns persist following a fresh wave of strikes against the Yemen-based Houthi group this week by U.S. and UK forces. Further pressure came from severe cold weather conditions that appeared to have spurred some disruptions in U.S. production.
For Thursday, some price action could be seen later in the session, upon the speech of FOMC Member Bostic Speaks, US jobless claims, US building permits, US housing starts, the Philly Fed Manufacturing Index, a speech by ECB President Lagarde and the EIA crude oil inventories report. On the earnings front, Schlumberger will be publishing their quarterly results later this week.