The dollar index rose to a 1-week high on Tuesday, supported by positive US economic news and higher T-note yields. The Dec MNI Chicago PMI beat expectations. Concerns about Fed independence, President Trump’s comments, and the Chinese yuan strength limited the dollar’s gains.

US Oct S&P Case-Shiller home price index beat expectations, rising +0.3% m/m and +1.3% y/y. Dec MNI Chicago PMI also exceeded expectations, rising +9.2 to 43.5.

The FOMC minutes from the December meeting were slightly hawkish, with policymakers divided on interest rate decisions. Markets are pricing in a 16% chance of a -25 bp rate cut at the next meeting.

EUR/USD fell to a 1-week low as the dollar strengthened, while concerns about the Russian-Ukrainian war weighed on the euro. Spain’s Dec core CPI rose more than expected, a positive sign for ECB policy.

USD/JPY rose on Tuesday as the yen weakened against the dollar. Higher T-note yields and BOJ signals of potential rate increases supported the dollar.

Gold and silver prices surged on Tuesday, driven by concerns over Fed independence and geopolitical tensions. The dollar’s strength and slightly hawkish FOMC minutes weighed on metals prices.

Bullish factors for precious metals include the FOMC’s liquidity injection, geopolitical risks, and central bank demand. Fund demand for gold and silver ETFs is strong.

Central bank demand for gold is rising, with China’s PBOC increasing its gold reserves. Global central banks also purchased more gold in Q3.

Read more at Yahoo Finance: Dollar Edges Higher on US Economic News and FOMC Minutes