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CIBC: More U.S. Dollar Weakness When Other Central Banks Turn Hawkish

Kitco News

CIBC looks for the recent softer trend in the U.S. dollar to eventually continue although perhaps with a pause for now. “The U.S. dollar weakness we had projected came faster than we thought, making a plateau likely,” the Canadian bank says in a monthly foreign-exchange outlook. “But there’s still another leg of USD depreciation down the road when overseas central banks turn more hawkish.” In the near term, the dollar might find some stability since U.S. policymakers are gearing up to raise interest rates again, while central bankers in other nations have “continued to push back” against hawkish expectations, CIBC says. “That relief, however, will be only temporary,” CIBC says. “As the year progresses, both the ECB [European Central Bank] and BOJ [Bank of Japan] won’t be able to deny the increasing scope to ease up on monetary stimulus in each jurisdiction. With expected Fed rate hikes already almost fully priced in, that changing external environment will see pressure re-emerge on the greenback, with dollar weakness extending into 2019 against both the euro and the yen.” Metals traders monitor the greenback closely since base and precious metals alike tend to move inversely to the U.S. currency.

By Allen Sykora of Kitco News; asykora@kitco.com

 

Commerzbank: Palladium Prices Falling Back On Profit-Taking

Thursday February 1, 2018 08:55

Palladium’s sharp declines the last two days are likely the result of profit-taking, says Commerzbank. The precious metal rose some 50% last year and added to those gains in early 2018, before turning south. “After shedding 3% the day before, palladium dropped by a further 2.5% yesterday,” Commerzbank says. As of a daily Commerzbank research note, palladium had shed $120, or 10%, from its mid-January high. “We attribute this to profit-taking after its surge over the past two years,” Commerzbank says. “In our view, palladium had risen excessively sharply in price of late. The correction is likely to continue as palladium now also looks embattled from a technical perspective. The price gap to platinum has meanwhile narrowed further to less than $30 per troy ounce, meaning that parity could be reached more quickly again than initially thought.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

RBC’s Gero: Gold In Holding Pattern Ahead Of U.S. Jobs Data

Thursday February 1, 2018 08:55

Gold is within Wednesday’s trading range as markets await Friday’s always-important U.S. monthly jobs report. As of 8:39 a.m. EST, Comex April gold was down $1 to $1,342.10 an ounce. “Gold off slightly; still in holding pattern waiting for lots of economic [data] and tomorrow the jobs number,” Gero says. Expectations are for January nonfarm payrolls to rise by 185,000.

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