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The U.S. Dollar Index ticked higher, supported primarily by a steep drop in the Japanese yen. After the Bank of Japan left rates unchanged and downgraded its growth outlook, the yen fell more than 1%, briefly touching 144.74. This currency divergence gave the dollar a modest lift, with DXY pressing toward the April 15 high of 100.276. If that level is breached, technical projections point to the 50% retracement zone at 101.302 as the next target. A stronger dollar tends to weigh on silver by raising the opportunity cost for non-yielding assets.
Fed Outlook Remains Murky as Jobless Claims Rise
Adding to the pressure, mixed U.S. economic signals have kept Fed expectations in flux. While Treasury yields dipped—10-year at 4.147% and 2-year at 3.568%—jobless claims unexpectedly rose to 241,000. This, coupled with a Q1 GDP contraction of 0.3%, has increased bets on a rate cut later this year. However, next week’s Fed meeting is expected to be uneventful. The true pivot may hinge on Friday’s nonfarm payrolls, with the market eyeing a 130,000 hiring estimate. Any surprise could jolt rate bets and ripple through metals markets.
Market Outlook
Silver remains vulnerable in the short term. Without a recovery above the 50-day moving average, rallies are likely to meet selling. Continued strength in the dollar, tied to global rate differentials and economic data, poses a headwind. Traders should monitor support around $31.45; a breach could accelerate selling toward $31.07.
More Information in our Economic Calendar.
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