The dollar index reached a 5.5-month high but ended up +0.03% on Friday. Comments from Fed officials supported the dollar, while an upward revision to the US Nov consumer sentiment index was positive. The markets are pricing in a 66% chance of a Fed rate cut on December 9-10.

EUR/USD fell by -0.15% and hit a new 2-week low due to a contraction in Eurozone manufacturing activity. The euro was further pressured by the rejection of a US-Russian plan by Ukraine. However, hawkish comments from ECB Vice President Luis de Guindos limited losses.

USD/JPY fell by -0.67% as the yen rallied on comments from Japanese Finance Minister Katayama supporting the yen. Better-than-expected Japanese trade and manufacturing data also bolstered the currency. Swaps are pricing in a 2% chance of an ECB rate cut.

Gold and silver prices were mixed on Friday, with silver falling to a 2-week low. Precious metals saw demand as a safe haven amid market turmoil, but hawkish central bank comments and easing inflation expectations weighed on prices.

Strong demand from central banks for gold is supportive. China’s PBOC increased gold reserves in October for the twelfth consecutive month. Global central banks purchased 220 MT of gold in Q3, up 28% from Q2, according to the World Gold Council.

Read more at Yahoo Finance: Dollar Posts Modest Gains as US Consumer Sentiment Revised Higher