Dollar Climbs with T-Note Yields

Currency Market Overview - The dollar index (DXY00) increased by +0.11% due to a rise in T-note yields, which enhanced the dollar's interest rate differentials [1] - The dollar's near-term upside is limited as the market anticipates a 25 basis point cut in the federal funds target range at the upcoming FOMC meeting [1][3] Federal Reserve Leadership - President Trump plans to announce his selection for the new Fed Chair in early 2026, with Kevin Hassett being the likely candidate [2] - Hassett's nomination is expected to be bearish for the dollar as he is viewed as a dovish candidate, raising concerns about Fed independence [2] Eurozone Economic Indicators - The Eurozone Dec Sentix investor confidence index rose by +1.2 to -6.2, surpassing expectations of -6.3 [5] - German Oct industrial production increased by +1.8% month-over-month, significantly above the expected +0.3% and marking the largest rise in seven months [5] European Central Bank (ECB) Stance - ECB Executive Board member Isabel Schnabel expressed confidence in the market's expectation of an interest rate increase as the next move by the ECB [4][6] - Divergent central bank policies are supporting the euro, as the ECB has concluded its rate-cutting cycle while the Fed is expected to continue cutting rates [5]