- The US dollar trades at a one-month low.
- Market expectations for future US rate hikes have been pared back sharply.
- Safe haven assets remain bid as markets shun risk.
Short-dated government yields are falling sharply Monday as traders pile into these safe-haven assets after two US were shuttered over the weekend. While the Fed’s backstop action, protecting depositors, was seen as a positive move, financial markets currently have a bad case of the jitters. Safe-haven assets including USTs, Bunds, gold, and the Japanese Yen are all strongly bid, while indices continue to sell off.
US DOLLAR (DXY) MARCH 13, 2023
![](http://signalsfactory.info/wp-content/uploads/2023/03/image-8-1024x569.png)
The US dollar is moving lower on the back of falling US Treasury yields and a growing sense that the Federal Reserve may pare back or even delay further rate hikes. Last week the market had been fully pricing in a 50bp hike at the March 22 FOMC meeting, while today a 25bp hike is expected with a chance of no rate hike at all now being considered.
![](http://signalsfactory.info/wp-content/uploads/2023/03/image-9-1024x518.png)
GOLD, another safe-haven asset class made a five-week high earlier in the session, just a handful of dollars off $1,900/oz level….
GOLD DAILY PRICE CHART
![](http://signalsfactory.info/wp-content/uploads/2023/03/image-10-1024x571.png)
while the Japanese Yen, seen as a safe currency in times of market stress, broke below 133.00 against the US dollar before rebounding slightly.
USD/JPY DAILY PRICE CHART
![](http://signalsfactory.info/wp-content/uploads/2023/03/image-11-1024x570.png)
All of the above markets are now starting to trade at extreme levels, using the CCI indicator, and may recover part of their current moves.