The dollar index (DXY) is down by 0.03% as of today, following an unexpected decline in the December Dallas Fed manufacturing outlook, which fell by 0.5 to -10.9. This drop contrasts with expectations of an increase to -6.0. Additionally, November pending home sales saw a rise of 3.3% month-over-month, surpassing forecasts of 0.9%. Markets are currently pricing in a 19% chance of a 25 basis point rate cut at the upcoming Federal Open Market Committee meeting on January 27-28.
In currency movements, EUR/USD has increased by 0.02% as the euro strengthened against the weakened dollar, while USD/JPY has decreased by 0.22% amid indications of further potential interest rate increases from the Bank of Japan. Precious metals are under pressure today, with February COMEX gold down $207.10 (4.55%) and March COMEX silver down $6.561 (8.53%) due to a combination of rising interest rate expectations and increased margin requirements set by the CME. Despite these declines, underlying demand for gold remains strong, with recent reports indicating that China’s PBOC gold reserves have risen for thirteen consecutive months, totaling 74.1 million troy ounces.
