Dollar Continues Rising But Stocks and Sovereign Debt Yields Pause Ahead of U.S. Data Reports
March 13, 2026
The weighted dollar index climbed another 0.4% overnight, moving above 100.0 for first time since November 25. The Korean won briefly touched 1500, its weakest level since March 31, 2009 when the global financial crisis was still raging. Other dollar advances so far today include gains of 0.6% versus sterling, which touched a 3-month low of $1.3240, 0.4-0.5% against the Australian and New Zealand currencies, and 0.4% relative to a near 8-month high against the euro of $1.1433.
Asian stock markets took their cue from the U.S. dive on Thursday, with losses today of 3.1% in Indonesia, 1.3% in Japan, 1.9% in India, 1.0% in Hong Kong and 09.8% in China. European equities are pretty flat so far, while U.S. stock futures have rebounded around 0.4% ahead of U.S. data that tend to move markets (GDP, personal income, personal spending, and the PCE price deflator).
Ten-year sovereign debt yields in Europe and the U.S. are little changed, but the 10-year Japanese JGB yields 7-basis point jump was an exception. Speculation flared about possible currency market intervention support for the yen after BOJ Governor Ueda expressed worry that yen weakness could lift import prices and overall inflation, which would be unwelcome.
The Trump administration is scrambling to reverse upward pressure on oil prices, relaxing sanctions against purchasers of Russian oil and calling for a allies to assist U.S. military efforts to make passage through the Strait of Hormuz safe again. The narrow passageway remains mostly closed to commercial traffic. Although down 1.6%, WTI oil’s price remains painfully high at $94.23 per barrel.
The price of Bitcoin climbed another 2.5% overnight and has risen 8.5% since Sunday evening. Silver and gold prices are 2.1% and 0.5% lower but still very pricey.
The Central Reserve Bank of Peru as expected left its key interest rate unchanged at 4.25%. There were just three well-spaced 25-basis point cuts made in 2025 following reductions totaling 175 bps in 2024 and 100 bps during the last four months of 2023. A released statement following this latest review of monetary policy strikes an upbeat mood, affirming that “the outlook for global economic activity this year points to stronger-than-expected growth and exceptionally favorable terms of trade for our economy” and makes not direct reference to the Middle Eastern war and rise of world oil price these past two weeks.
U.S. GDP last quarter grew 0.7% at a seasonally adjusted annual rate, only half as much as the 1.4% estimated initially. Compared to the final quarter of 2024, GDP growth was revised to 2.0% from 2.2%, and full-2025 GDP growth of 2.1% was only three-fourths as much as 2.8% in 2024, the last year of the Biden presidency. Personal consumption, non-residential investment, and government spending were each revised weaker. Government spending and net foreign demand together exerted a 1.25 percentage point drag on GDP growth last quarter. 2025 was the fifth consecutive year with the personal consumption price deflator rising faster than 2.7%: 3.6% in 2021, 5.3% in 2022, 4.2% in 2023, 2.9% in 2024 and 2.8% last year.
While U.S. inflationary forces spiked in the first half of the Biden presidency, disinflationary in the second half of it made far greater progress than in the first year of Trump’s second term. The separate release today of U.S. personal income, personal spending and the PCE price deflator reveals an ample 0.4% monthly rise of both personal income and personal consumption, with the latter being the fourth increase of 0.4% in the last five months. But the all-important non energy & food PCE price deflator favored by Fed officials reveals as well a further acceleration of inflationary pressure to a year-on-year 3.1% in January from 3.0% in December and 2.8% in the prior three months. All this happened in a month when WTI oil prices averaged less than $60 and before this month’s huge upsurge.
U.S. durable goods orders and the sub-category of orders for non-defense capital goods excluding aircraft (a barometer of future business investment) each flat-lined in January.
Several British data reports this Friday accentuate that economy’s malaise. Real GDP in January was unchanged on month and just 0.8% higher than a year earlier. Compared to January 2025, industrial production and construction output rose by 0.4% and fell 0.2%, respectively. However, thanks to the smallest merchandise trade deficit in two years (just GBP 14.5 billion), the goods and services trade balance, which posted deficits of GBP 17.7 billion in 2024 and GBP 21.8 billion last year, recorded a rare surplus of GBP 3.92 billion in January.
Euroland industrial production in January proved to be a real clunker of a report, falling by the most in nine months (-1.5% after a December drop of 0.6%) and defying expectations of about a 0.5% increase. Weakness was broadly spread among non-energy items, and Germany, Italy, Spain, Romania, Croatia and Ireland were among individual countries with a drop in output during the month.
Price data released today showed
- A 6-month high in Argentine consumer price inflation in February of 33.1%..
- Romanian CPI inflation of 9.3%, the seventh straight reading above 9.0%.
- A downward 0.1 percentage point revision in French CPI inflation last month. At 0.9% following January’s 61-month low of 0.3%, the pace was still just 1/7th as high as the early 2023 peak of 6.3%.
- Finnish CPI inflation of 0.6% in February returned to positive territory but stayed below 1.0% for the 15th straight time.
- Polish CPI inflation matched January’s 22-month low of 2.1%.
- Spanish CPI inflation in February was left unrevised from the flash estimate (+0.4% on month and 2.3% on year).
- Slovakian CPI inflation eased 0.3 percentage points last month to a 3-month low of 3.7%.
- German wholesale prices rose 0.6% in February but retained a 1.2% year-on-year increase for a third straight month.
New Zealand’s manufacturing purchasing managers index printed at 55.0 in February, its eighth straight reading above the 50 neutral level.
A little past 10:00 EDT and after the U.S. data had been learned, the dollar retained its firm overnight tone, the ten-year Treasury yield had eased another basis point, and all four broad U.S. equity indices were comfortably in green territory.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Central Reserve Bank of Peru, U.S. GDP and PCE price deflator
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