Gold prices soared – posting the largest daily increase in three weeks – as a plunging US Dollar bolstered the appeal of anti-fiat assets. The Greenback suffered from cross-currency flows. GBP/USD soared on supportive Brexit news and a somewhat more hawkish BOE policy update while AUD/USD and NZD/USD raced upward after China signaled more fiscal stimulus ahead.
A somewhat confounding drop in Treasury yields and parallel flattening of the 2019 rate hike outlook priced into Fed Funds futures compounded the US unit’s pain. The dovish shift played out against the backdrop of firming risk appetite, which might have been expected to produce the polar opposite result. The move was promptly erased in Asia Pacific trade however, hinting it may have reflected one-off repositioning.
Crude oil prices continued to fall in the meanwhile, suffering the fourth consecutive daily loss.