CIBC: More U.S. Dollar Weakness When Other Central Banks Turn Hawkish
CIBC looks forthe recent softer trend in the U.S. dollar to eventually continue althoughperhaps with a pause for now. “The U.S. dollar weakness we had projected camefaster than we thought, making a plateau likely,” the Canadian bank says in amonthly foreign-exchange outlook. “But there’s still another leg of USDdepreciation down the road when overseas central banks turn more hawkish.” Inthe near term, the dollar might find some stability since U.S. policymakers aregearing up to raise interest rates again, while central bankers in othernations have “continued to push back” against hawkish expectations, CIBC says.“That relief, however, will be only temporary,” CIBC says. “As the yearprogresses, both the ECB [European Central Bank] and BOJ [Bank of Japan] won’tbe able to deny the increasing scope to ease up on monetary stimulus in eachjurisdiction. With expected Fed rate hikes already almost fully priced in, thatchanging 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 metalsalike tend to move inversely to the U.S. currency.
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank: Palladium PricesFalling Back On Profit-Taking
Thursday February 1, 2018 08:55
Palladium’s sharp declines thelast two days are likely the result of profit-taking, says Commerzbank. Theprecious 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 afurther 2.5% yesterday,” Commerzbank says. As of a daily Commerzbank researchnote, palladium had shed $120, or 10%, from its mid-January high. “We attributethis to profit-taking after its surge over the past two years,” Commerzbanksays. “In our view, palladium had risen excessively sharply in price of late.The correction is likely to continue as palladium now also looks embattled froma technical perspective. The price gap to platinum has meanwhile narrowedfurther to less than $30 per troy ounce, meaning that parity could be reachedmore quickly again than initially thought.”
By Allen Sykoraof Kitco News; asykora@kitco.com
RBC’s Gero: Gold In Holding Pattern AheadOf U.S. Jobs Data
Thursday February 1, 2018 08:55
Gold is within Wednesday’s trading rangeas markets await Friday’s always-important U.S. monthly jobs report. As of 8:39a.m. EST, Comex April gold was down $1 to $1,342.10 an ounce. “Gold off slightly; still in holdingpattern waiting for lots of economic [data] and tomorrow the jobs number,” Gero says. Expectations are for Januarynonfarm payrolls to rise by 185,000.
By Allen SykoraFor Kitco News
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asykora@kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.