Dollar Pushes Higher as Bond Yields Rise

Group 1 - The dollar index rose by +0.15% on Friday, driven by weakness in the euro and yen, which fell to 1.5-week lows against the dollar [1] - The US Dec S&P manufacturing PMI remained unchanged at 51.8, aligning with expectations [1] - The markets are pricing in a 15% chance of a -25 basis point rate cut at the FOMC's next meeting on January 27-28 [2] Group 2 - The dollar is under pressure as the Fed increases liquidity by purchasing $40 billion a month in T-bills, which began in mid-December [3] - Concerns about President Trump's potential appointment of a dovish Fed Chair are bearish for the dollar, with Kevin Hassett seen as the most likely candidate [3] - The Eurozone Dec S&P manufacturing PMI was revised downward by -0.4 to 48.4 from a previously reported 49.2, contributing to bearish sentiment for the euro [4] Group 3 - The Eurozone Nov M3 money supply increased by +3.0% year-on-year, surpassing expectations of +2.7% year-on-year, marking the highest growth in four months [5] - Swaps indicate a 0% chance of a +25 basis point rate hike by the ECB at the next policy meeting on February 5 [5] - The USD/JPY rose by +0.08% as the yen slid to a 1.5-week low against the dollar, influenced by dollar strength and higher T-note yields [5]