The U.S. Dollar Index remained strong overall this week. Supported by expectations of high interest rates from the Federal Reserve and a waning bearish narrative, the index rose for three consecutive trading days, peaking at 101.8 on Wednesday—a 13-month high.On Thursday, as U.S. inflation data came in line with expectations and concerns over interest rate hikes eased, the dollar retreated slightly, but it still ended the week higher.
Precious metals came under pressure overall. Spot gold briefly surged to around $4,220 early in the week but then fell consecutively due to a stronger dollar and liquidity pressures, at one point dropping below $4,000 to hit its lowest level since November of last year.Although it rebounded above $4,000 on Thursday, it still followed a pattern of rising and then falling for the week and is expected to close lower for the seventh consecutive week.
Silver underperformed gold; after breaking below the $60 mark on Wednesday, it hit a low of $55.7 per ounce—its lowest level since December of last year. Although it rebounded slightly on Thursday, it remained weak overall.
Crude oil experienced sharp volatility this week, with both WTI and Brent having erased their entire war premium.At the start of the week, prices opened sharply higher following Trump’s threat to reignite the war with Iran and Iran’s announcement that it would once again close the Strait of Hormuz. Subsequently, as U.S.-Iran tensions eased and the Strait of Hormuz reopened to shipping, both WTI and Brent crude oil fell back to pre-conflict levels.On Thursday, prices rebounded following renewed attacks on ships in the Strait of Hormuz, but failed to recoup previous losses, resulting in a significant weekly decline.
Non-U.S. currencies came under pressure across the board. The euro fell for two consecutive weeks, the British pound remained volatile, and the U.S. dollar rose against the yen to just below 162, approaching its lowest level since 1986. Persistent U.S. inflation and expectations of interest rate hikes supported the dollar, while the yen, despite expectations of intervention, has yet to reverse its weakness.