Geopolitical concerns continued to drive risk aversion and safe-haven flows last week, with gold prices reaching the highest point since before the November US elections as tensions on the Korean Peninsula continued to climb. The dollar remained under pressure, finishing the week flat despite amped up rhetoric as comments President Trump flipped on interest rates while cementing earlier comments that the dollar was getting “too strong.” US inflation however may contribute to weakened rate hike prospects after both the headline and core annualized consumer price growth slowed during March. Chinese inflation also came in weaker than anticipated, coming in at 0.90% on an annualized basis after missing forecasts of 1.00%.
The trade balance managed to rebound however, widening to $23.92 billion amid a significant rebound in exports as the lunar new year holiday aberration gradually passes. On the employment side, jobless rates in Australia and the United Kingdom remained on hold at 5.90% and 4.70% respectively, with UK CPI stable at 2.30% despite the gradual base effect of energy prices passing. In other news, the Bank of Canada left interest rates on hold at 0.50% as the economy continues to experience uneven growth. As a result, markets are now not anticipating any rate hikes before 2018.