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The U.S. dollar index remained stable as it faced pressure after the November MNI Chicago PMI recorded a 17-month low. This comes despite better-than-expected U.S. economic data, including a drop in weekly jobless claims to a seven-month low and a rise in September capital goods orders. Markets currently expect an 81% probability of the Federal Open Market Committee (FOMC) cutting the fed funds target range by 25 basis points at their next meeting on December 9-10.
The euro gained 0.18%, supported by comments from ECB Governing Council member Boris Vujcic regarding balanced risks in the Eurozone. However, uncertainty over the Russian-Ukrainian peace talks limited its gains. Meanwhile, the U.S. dollar was further pressured by reports that Kevin Hassett is a leading candidate for the U.S. Fed Chair position, viewed as a dovish pick.
The USD/JPY pair rose by 0.29%, impacted by a significant rally in the Nikkei Stock Index and eased Japan PPI service prices. Additionally, Japan’s September leading index was revised upward to an 11-month high, while October machine tool orders showed the largest annual increase in over three years. Markets anticipate a 44% chance of a Bank of Japan rate hike at their next meeting on December 19.
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