Gold Higher After Fed Member Comments

The dollar resumed its fall on Monday after its steepest weekly drop in 3-1/2 years, as comments by a top Federal Reserve official added to last week’s dovish policy message.

The dollar’s fall helped copper and gold prices to firm while European shares dipped, giving back some of last week’s strong gains, and U.S. futures pointed to a flat start on Wall Street.

St Louis Fed President James Bullard told CNBC that the dollar index, which measures the greenback against a basket of major currencies, was not far from fair value and it was unclear how much more it would strengthen against the euro.

The dollar, which hit a 12-year high this month, was down 0.5 percent at 1227 GMT, having dropped 2.6 percent last week after the Fed eased fears of an aggressive rise in its interest rates.

“People are just a bit nervous about the dollar’s strength at the moment,” said James Hughes, chief market analyst at online broker eToro.

The benchmark FTSEurofirst share index dropped 0.7 percent, pulling back from a seven-year high. [.EU]

Spanish yields nudged higher after the anti-austerity party Podemos made big inroads in regional elections, with a vote split across the political spectrum offering a possible foretaste of national elections later this year. [GVD/EUR]

“…with Podemos there’s some political risk as we don’t know how strong they will be in general elections and how much this might influence the established parties in their programmes,” said DZ Bank strategist Daniel Lenz.

Attention was also returning to Greece, with Prime Minister Alexis Tsipras due to meet Angela Merkel in Berlin later on Monday

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza