Dollar Pushes Higher as Stocks Weaken

Economic Indicators - The Eurozone's November CPI was revised downward to +2.1% year-on-year from +2.2% [6] - Eurozone Q3 labor costs increased by +3.3% year-on-year, the smallest rise in three years [6] - The German December IFO business conditions survey unexpectedly fell to a 7-month low of 87.6, against expectations of an increase [7] Central Bank Policies - The Federal Reserve is expected to continue cutting interest rates in 2026, while the European Central Bank (ECB) is perceived to have completed its rate-cutting cycle [6] - The markets are pricing in a 0% chance of a -25 basis point rate cut by the ECB at the upcoming policy meeting [7] - Fed Governor Christopher Waller indicated that interest rates are still 50-100 basis points above neutral, allowing for steady rate cuts without urgency [3][5] Currency Movements - The Euro fell by -0.04% against the dollar due to a stronger dollar and dovish economic indicators from the Eurozone [1] - The dollar index rose by +0.24%, supported by weakness in GBP/USD and yen, as well as increased liquidity demand from a stock market slump [5] - USD/JPY rose by +0.63%, influenced by the dollar's strength and concerns over Japanese fiscal policy [8] Precious Metals Market - Precious metals, including gold and silver, saw significant gains, with March silver reaching an all-time high of $66.48 per troy ounce [12] - Demand for precious metals is bolstered by safe-haven buying amid geopolitical tensions and dovish comments from the Fed [12][13] - Central bank demand for gold remains strong, with China's PBOC increasing its reserves by +30,000 ounces to 74.1 million troy ounces in November [14]