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The dollar index (DXY00) increased by +0.13% on Friday, recovering from a two-week low, following comments from Kansas City Fed President Jeff Schmid and Dallas Fed President Lorie Logan advocating against further Fed rate cuts. The likelihood of a rate cut at the upcoming FOMC meeting in December fell to 42%, down from 70% the previous week.
The Eurozone’s Q3 GDP was upwardly revised to +1.4% year-over-year from +1.3%, while EUR/USD declined by -0.12%. In Japan, the September tertiary industry index increased by +0.3%, marking the largest growth in four months, as the yen showed modest gains. The market is assessing a 32% chance of a BOJ rate hike at the December 19 policy meeting.
In precious metals, December COMEX gold fell -2.39% and silver dropped -4.67% as Fed rate cut expectations diminished, with heavy liquidation observed. Central bank demand for gold remains strong, with China’s PBOC increasing its reserves to 74.09 million troy ounces, while global central bank purchases rose by 28% in Q3.
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