The dollar climbed to a 5.5-month high (+0.04%) as equity weakness and hawkish comments from Boston and Dallas Fed officials supported USD liquidity demand, though gains were pared by New York Fed President John Williams’ dovish suggestion of room for a near‑term cut; University of Michigan sentiment was revised up to 51.0 while 1‑year and 5–10‑year inflation expectations fell to 4.5% and 3.4% respectively, and markets price a ~64% chance of a 25bp Fed cut at the Dec 9–10 meeting. The euro slipped (-0.14%) to a two‑week low on the stronger dollar, weaker Eurozone manufacturing PMI (49.7) and geopolitical setbacks, while ECB officials maintained a hawkish tone; the yen strengthened (USD/JPY -0.71%) after Japan’s firmer trade and PMI data and a finance‑minister warning on intervention, leaving only ~16% odds of a BOJ hike at the next meeting. Precious metals were mixed—gold modestly higher (+0.25%) and silver down (-1.76%)—as safe‑haven flows from the equity selloff and dovish Fed comments were offset by dollar strength, hawkish central‑bank rhetoric and easing breakeven inflation (10‑yr at ~2.239%), with ongoing central bank gold buying noted as a structural support.
The dollar index climbed to a 5.5-month high (+0.04%) amid a near-term liquidity bid from a slump in equities and supportive hawkish remarks from Boston Fed President Susan Collins and Dallas Fed President Lorie Logan, who favored holding rates steady; gains were trimmed after New York Fed President John Williams signaled room for a Fed cut in the "near term." US activity and sentiment data were mixed: the Nov S&P manufacturing PMI eased to 51.9 (‑0.6) close to expectations, while the University of Michigan November consumer sentiment was revised up to 51.0 (vs. 50.6 expected) even as 1-year and 5–10 year inflation expectations fell to 4.5% and 3.4% respectively. Markets price roughly a 64% probability of a 25 bp Fed cut at the Dec 9–10 meeting, reflecting that liquidity and rate-expectation uncertainty are currently the dominant USD drivers. EUR/USD slipped 0.14% to a two‑week low after the Eurozone Nov S&P manufacturing PMI unexpectedly contracted to 49.7 (steepest 5‑month decline) and geopolitical setbacks; ECB Vice President Luis de Guindos retained a hawkish tone and swaps show only ~3% chance of a December ECB cut. USD/JPY fell 0.71% as the yen strengthened on a Japanese Finance Minister warning on intervention plus better-than-expected Oct trade (exports +3.6% y/y vs. +1.1% exp.) and Oct national CPI at +3.0% y/y, with markets assigning ~16% odds of a BOJ hike. Gold was up modestly (+0.25%) while silver dropped (-1.76%); precious metals benefit from safe-haven flows and dovish Williams comments but are capped by dollar strength, hawkish central bank rhetoric and a decline in 10‑yr breakeven inflation to ~2.239% (6.5‑month low). Structural central bank demand remains supportive—China PBOC reserves rose to 74.09 million troy ounces in October and global central bank purchases were 220 MT in Q3 (+28% q/q)—yet ETF holdings have pulled back since mid‑October record levels, leaving mixed near‑term technicals.
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mildly negative
Sentiment Score
-0.30
