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Dollar softer on U.S

14 March 2019

USA stocks rose broadly after US producer price data backed the Federal Reserve's patient stance on future interest rate hikes.

The euro increased 0.4 percent to $1.1337, the strongest in a week. The pound started the day higher after Prime Minister Theresa May announced a revised divorce deal, but dropped by as much as 1.1% versus the dollar as Attorney General Geoffrey Cox said the risks surrounding the Irish backstop - a major sticking point for those who support Brexit - were unchanged. This would be a "nuclear option" which would effectively expose the destruction of British democracy, yet it remains a possibility, and I believe it is this possibility which explains why the British Pound is trading over 1% up on the day against the U.S. Dollar at $1.3216 at the time of writing.

Lawmakers will vote later Wednesday on whether Britain should quit the world's biggest trading bloc without a deal. U.S. producer prices barely rose in February, the U.S. Labor Department reported on Wednesday, resulting in the smallest annual increase in more than 1-1/2 years.

USA crude stocks fell last week as refineries hiked output, the Energy Information Administration said.

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Gold hit almost a two-week high as tepid United States economic data reinforced views the Fed would be patient on monetary policy.

Britain's 10-year yield rose three basis points to 1.2 percent. The U.S. central bank's rate-setting committee will issue its next policy statement following its March 19-20 meeting.

The U.S. dollar bought 111.03 Japanese yen, lower than 111.27 Japanese yen of the previous session. Lawmakers voted to avoid a no-deal split on Wednesday in a decision welcomed by markets, although it did little to suggest what kind of Brexit a majority might support. The stock closed up 0.5 percent.

Wednesday's vote boosted investor optimism in European equities too, with the pan-European STOXX 600 index climbing 0.6 percent while London's FTSE 100 added 0.1 percent as sterling extended gains.

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On Wall Street, the Dow Jones Industrial Average rose 155.29 points, or 0.61 percent, to 25,709.95.

US Treasury yields rose after falling in the previous session as risk appetite improved and equity markets steadied. The dollar fell and 10-year Treasury yields turned negative after core inflation cooled.

USA 30-year bond yields were up at 3.011 percent from 2.99 percent on Tuesday.But yields on both 10-year notes and 30-year bonds have fallen in six of the last eight sessions.

Spot gold gained 0.6 percent to $1,309.30 per ounce as of (2056 GMT), its highest level since March 1.USA gold futures settled 0.9 percent higher at $1,309.3 per ounce. Crude oil climbed after Saudi Arabia was said to extend deep supply cuts.

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Brent crude futures settled at $67.55 a barrel, up 88 cents, or 1.32 percent. West Texas oil was boosted by a decline in USA crude and fuel stockpiles added to evidence of a tightening market.

Dollar softer on U.S