Last week Recap: Pull-Back in Treasury Yields drags down Dollar

On Thursday, the Dollar weakened, posting its steepest one-day drop in over two weeks, due to lower US Bond Yields and doubts over the timing of the Fed’s next interest rate increase. Donald Trump’s first solo news conference on Thursday, where he adopted a combative stance against the news media and deflected questions about contacts between his presidential campaign and Russian operatives, also gave investors pause.

On Friday, Oil prices edged up early following reports that Organization of the Petroleum Exporting Countries (OPEC) could extend its oil supply-reduction pact with non-members and might even apply deeper cuts if global crude inventories failed to drop to a targeted level. The OPEC and other producers have agreed to cut output by almost 1.8 million barrels per day during the first half of 2017, and estimates suggest compliance by OPEC is around 90%.

Meanwhile, Gold rose against its major peers, as the Dollar weakened after a 10-day winning streak and investors took the opportunity to buy Bullion as a hedge against political uncertainty in the United States and Europe. Concern over Donald Trump’s policies, as well as elections in the Netherlands, France and Germany this year, fueled the Gold rise to a one-week high of $1,242.30.

ECB minutes for the January meeting unveiled that officials were in no hurry to reduce stimulus. Indeed, to facilitate the asset purchase measures, the Central Bank signaled willingness to deviate from the capital key policy; the structure that governs the proportion of Bonds the ECB can buy from each country.