Palladium prices dipped on Tuesday and approached $900, as the dollar traded mostly flat against a basket of major rivals. 

Palladium was recently underpinned by copper’s recent spike, which buoyed most industrial metals.

It was also slightly boosted by speculation the Federal Reserve will cut interest rates at least once this year. 

Palladium marked a loss of 7.91% in the first quarter, while platinum marked a 8.77% loss in the same period. 

Palladium then managed to surpass $1000 in late May, as most industrial metals edged higher from the first quarter’s lows. 

Platinum and palladium have important industrial implications, and thus are impacted by economic developments more so than their status as precious metals. 

Palladium 

Palladium is used heavily in the automotive sector, and especially in diesel cars to reduce exhaust fumes.

However, as EV cars adoption spreads, demand on internal combustion cars and palladium in turn will decline accordingly. 

Palladium’s Historical Pricing 

Across the previous decade, palladium’s instant prices wavered between $500 and $1500, beforere surging to a record high at $3440 in March 2022 following the onset of the Russian invasion of Ukraine, which disrupted supplies. 

However palladium now has lost over two thirds of its valuation due to steep increase in EV adoption rates. 

Otherwise, the dollar index fell 0.1% as of 17:30 GMT to 104.1, with a session-high at 104.3, and a low at 103.9.

Palladium futures due in June fell by 1.2% as of 17:31 GMT to $902 an ounce.

Bitcoin rose on Tuesday on track for the fourth profit in a row amid an improving risk appetite that dominated the market, with bitcoin preparing to pierce through $70,000 once more.

Bitcoin could hit fresh highs this week if weak US data continued to be released, which would bolster the case for two Federal Reserve rate cuts this year.

The Price 

Bitcoin rose 0.8% at Bitstamp today to $69,339, with a session-low at $68,553. 

Bitcoin rallied 1.55% on Monday, marking the third profit in a row.

Crypto Market Value 

Crypto market value rose by $10 billion on Tuesday to a total of $2.710 trillion as both bitcoin and ethereum gain ground.

US Yields 

US 10-year treasury yields fell by 0.4% today, plumbing three-week lows at 4.375%, with risk appetite in turn rebounding. 

Recent data showed US manufacturing shrank again in May, while construction spending fell unexpectedly, indicating a slowdown in US growth.

Following the data, the odds of a September interest rate cut in September rose to 60%, and to 72% in November according to the Fedwatch tool. 

Later today, the JOLTS Job Opportunities survey is expected to show the availability of 8.37 million new jobs in April. 

Dollar rose in European trade on Tuesday against a basket of major rivals, holding its ground above two-month lows and on track for the first profit in four days. 

The gains are stymied by the declining US 10-year treasury yields following weak US data, which signaled slowing GDP growth in the second quarter.

Now traders await important US labor data, which could provide fresh clues on the path ahead for US monetary policies. 

The Index 

The dollar index rose 0.3% to 104.33, with an April 9 low at 103.99. 

The index closed down 0.55% yesterday, marking the third loss in a row. 

US 10-year treasury yields fell 0.4% on Tuesday on track for the fourth loss in a row, marking three-week lows at 4.375%. 

Grim Data

Recent data showed US manufacturing shrank again in May, while construction spending fell unexpectedly, indicating a slowdown in US growth. 

Following the data, the odds of a September interest rate cut in September rose to 60%, and to 72% in November according to the Fedwatch tool. 

Fresh Data

Later today, the JOLTS Job Opportunities survey is expected to show the availability of 8.37 million new jobs in April. 

Euro rose on Tuesday against a basket of major rivals, extending gains for the fourth straight session against the dollar and surpassing $1.09 to a three-month high on hopes of shrinking the US-eurozone interest rate gap this year. 

The European Central Bank prepares to cut European interest rates for the first time since 2024, in the first step of policy easing in Europe, however such a process is expected to be slower than expected.

Inflation in Europe accelerated once more in May, in turn renewing pressures on European policymakers and hurting the odds of multiple ECB rate cuts this year. 

On the other hand, the odds of multiple Fed rate cuts in September and November improved following a spate of weak US data.

The Price 

The EUR/USD rose 0.1% to $1.0916, the highest since March 21, with a session-low at $1.0899. 

Euro rose 0.55% on Monday against the dollar, the largest profit since May 15 as US yields dipped.

European Rates 

Recent European inflation data reduced the expected rate cuts by the ECB from 75 to 50 basis points this year.

US Rates 

Recent data showed US manufacturing shrank again in May, while construction spending fell unexpectedly, indicating a slowdown in US growth.

Following the data, the odds of a September interest rate cut in September rose to 60%, and to 72% in November according to the Fedwatch tool. 

Rate Gap

The US/eurozone interest rate gap currently stands at 100 basis points, the lowest since May 2022, and is expected to expand to 125 basis points this week in favor of the US. 

The ECB 

Later on Wednesday, the ECB will hold its periodic policy meeting, widely expected to cut interest rates by 25 basis points.

ECB President Christine Lagarde will provide fresh clues on the prospects of European rate cuts and policy easing later this yeare. 

Euro Outlook

UBS’s analysts expect the euro to soften this week on profit-taking after strong gains in the past few weeks. 

However, the ECB could surprise us with a bullish stance on future policies, with a potential delay of the timing of the next rate cut, in turn underpinning the euro and sending it above $1.09.