The dollar index fell to a 2-week low, down -0.05%, due to yen strength and a weaker-than-expected Nov US ISM manufacturing index. Expectations of a Fed rate cut at the Dec 9-10 meeting are high, with a 96% chance priced in. The dollar recovered slightly as T-note yields rose.

Negative carryover from reports of Kevin Hassett potentially becoming the next US Fed Chair is weighing on the dollar. Hassett is seen as dovish, and his nomination could question Fed independence. He supports Trump’s push for lower interest rates.

US Nov ISM manufacturing index dropped to a 4-month low of 48.2, missing expectations. The Nov ISM price paid sub-index rose unexpectedly to 58.5, indicating price pressures. Markets predict a 96% chance of a Fed rate cut at the Dec 9-10 meeting.

EUR/USD climbed to a 2-week high, up +0.09%, supported by a weaker dollar and hawkish comments from ECB’s Nagel. Divergent central bank policies favor the euro. Eurozone Nov S&P manufacturing PMI revised down to 49.6, showing contraction.

USD/JPY fell by -0.45% as the yen reached a 2-week high against the dollar. Hawkish comments from BOJ’s Ueda and a slump in the Nikkei boosted yen demand. Japan’s Q3 capital spending was weaker than expected, and the Nov S&P manufacturing PMI revised down to 48.7.

Gold and silver prices surged on Monday, with gold hitting a 1.25-month high and silver reaching a contract high. The decline in the dollar index is boosting metals prices, along with expectations of a Fed rate cut. Demand for precious metals as a store of value is on the rise.

Silver’s support comes from tight Chinese silver inventories, hitting a 10-year low. Strong central bank demand for gold is also lifting prices, with global banks purchasing more gold in Q3. Long liquidation pressures have weighed on prices after record highs in mid-October.

Read more at Yahoo Finance: Yen Strength Weighs on the Dollar