Dollar Gains Strength

[Excerpted from Bill Cara's Daily Report]

The $USD turned very strong Tuesday morning (and the Euro weak), with the expected result that gold and silver prices have dropped.

In Asia-Pacific equity markets today, Tokyo (+0.4% to 9080.8), Shanghai (+3.0% to 1937.2), India (+0.6% to 10335.9), and Australia (+1.38% to 3689.2) were higher, but Hong Kong dropped a bit (-0.35% to 15509.5). HK had gained +4.6% on Friday, and +3.5% yesterday, and needed a rest.

Earlier Tuesday morning (7:09am ET), the European bourses were stronger: French CAC +1.0%; German DAX +1.5%; and UK FTSE +1.4%.

In the forex market Monday, the US Dollar was up +1.1% to 82.75, while the Euro was down -2.1% to 136.33. The Yen dropped -1.5% to 107.20, but the Pound (+1.1% to 147.06) and Loonie (+1.7% to 83.99) were winners. This morning the $USD is strong at 84.46 and the Euro weak at 133.93.

Crude Oil futures ($WTIC), which had gushed +$5.57/bbl on Wednesday and an additional +$1.74/bbl to close the week at 46.34, was up to 47.09 at 7:00am ET. The futures closed yesterday at 48.81, up +$2.47/bbl. Today, at 9:15am ET, the Crude futures are well up at 49.75.

The weak Euro/strong Dollar may fool some traders who are expecting weak precious metals to follow Monday’s weakness. Do not be fooled.

Spot prices for gold, palladium, platinum and silver at 9:30am ET were 8547.80, 197, 961, and 11.17, respectively.

DJIA futures at 9:15am were +55 at 8973. The DJIA just opened +72 at 9033.