Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) is down by -0.33% at a 2-week low, influenced by the strength of the yen and expectations of a Fed rate cut [1] - The US Nov ISM manufacturing index unexpectedly fell -0.5 to a 4-month low of 48.2, weaker than the expected increase to 49.0, indicating economic contraction [3] - The markets are pricing in a 100% chance of a 25 basis point cut in the fed funds target range at the upcoming FOMC meeting on December 9-10 [3] Group 2: Federal Reserve and Leadership Speculation - The dollar is under pressure due to speculation regarding Kevin Hassett as a potential candidate to succeed Jerome Powell as US Fed Chair, which is seen as bearish for the dollar [2] - Hassett's nomination could raise concerns about Fed independence, as he supports President Trump's approach to interest rate cuts [2] Group 3: Euro and ECB Policy - The EUR/USD is up by +0.32% at a 2-week high, supported by a weaker dollar and hawkish comments from ECB officials [4] - ECB Governing Council member Nagel stated that Eurozone interest rates are currently in a good place, indicating a divergence in central bank policies [4][5] - The Eurozone Nov S&P manufacturing PMI was revised downward by -0.1 to 49.6, marking the steepest pace of contraction in 5 months [5]

Group 1 - The European Central Bank (ECB) is expected to keep interest rates steady at 2% for an extended period, potentially into 2026, with some forecasts suggesting a future rate hike [1][2][3] - ECB President Christine Lagarde indicated that inflation is at the desired level and the domestic economy remains solid, leading UBS Global Wealth Management to revise its forecast for a December rate cut [2][3] - Traders are pricing an 84% probability that the ECB will maintain current rates until the end of 2025, with expectations for a rate increase in 2026 from institutions like TD Securities and Deutsche Bank [3][4] Group 2 - J.P. Morgan has adjusted its forecast for a 25-basis-point cut to December, while other firms like Barclays and Morgan Stanley still anticipate a quarter-point cut in the same month [4] - The ECB's inflation outlook remains uncertain, with Lagarde stating that economic risks are more balanced compared to previous assessments [3][4]