The dollar index (DXY00) is up +0.09% due to Eurozone fiscal concerns and lower EUR/USD. The dollar also saw support from lower US jobless claims. The Fed’s liquidity boost, potential dovish Fed Chair, and weaker US reports initially weakened the dollar. Stocks’ strength reduced dollar liquidity demand.

US weekly initial jobless claims dropped -13,000 to 224,000, meeting expectations. However, US Nov CPI rose +2.7% y/y, weaker than expected. Nov core CPI also increased +2.6% y/y, the smallest rise in 4.5 years. The US Dec Philadelphia Fed business outlook survey fell unexpectedly, indicating economic challenges.

EUR/USD (^EURUSD) is down -0.20% as the euro weakens post-ECB interest rate decision. The ECB raised its 2025 GDP forecast but markets are concerned about fiscal issues in the Eurozone. Germany’s increased federal debt sales and Bloomberg’s report on the end of interest rate cuts pressured the euro.

USD/JPY (^USDJPY) is down -0.12%, with the yen rising against the dollar. Lower T-note yields support the yen, and expectations of a BOJ rate hike also boost the currency. Concerns over Japanese fiscal policy may limit yen gains, with a record budget planned for 2026.

Gold and silver prices are lower today as stocks rally, reducing safe-haven demand. Hawkish comments from central banks and expectations of a BOJ rate hike weigh on precious metals. However, precious metals found support after the BOE’s rate cut and dovish US economic reports.

Central bank demand for gold remains strong, with China’s PBOC increasing gold reserves for the thirteenth consecutive month. Silver has support from tight Chinese inventories. Long liquidation pressures have impacted precious metals prices, though silver ETF holdings have rebounded recently.

Read more at Yahoo Finance: Dollar Recovers as EUR/USD Weakens