The U.S. dollar index hit a 2.75-month low today but has since stabilized, trading weakly despite a stronger-than-expected Q3 GDP growth of 4.3% and a reduction in the odds for a Federal Reserve rate cut at the next meeting from 20% to 13%. In weekly initial unemployment claims reported for the week ending December 20, filings decreased by 10,000 to 214,000, surpassing expectations, while continuing claims rose by 38,000 to 1.923 million.
In China, the People’s Bank of China expressed a cautious approach during its quarterly monetary policy meeting, emphasizing long-term stability without sudden interest rate cuts despite ongoing economic challenges such as a weak property market and lower domestic demand. The market anticipates a potential 50 basis point rate cut in the U.S. in 2026, contrasting with expectations of a 25 basis point increase from the Bank of Japan during the same period.
Precious metals have recently faced sell-offs despite posting all-time highs earlier this month. The pullback is largely attributed to the U.S. GDP data reducing rate cut expectations. Notably, global central banks increased gold reserves to 74.1 million troy ounces, with a reported 220 metric tons purchased in Q3, marking a 28% rise from Q2.
