The dollar index climbed to a 1-week high, boosted by yen weakness and optimistic comments from New York Fed President John Williams. However, the dollar retreated slightly after a lower-than-expected revision to the US Dec consumer sentiment index. The Fed’s liquidity injections and concerns about a dovish Fed Chair appointment are also pressuring the dollar.

US Nov existing home sales reached a 9-month high of 4.13 million, slightly below expectations. The University of Michigan revised the US Dec consumer sentiment index downward and unexpectedly raised 1-year inflation expectations to 4.2%.

EUR/USD fell to a 1-week low due to disappointing Eurozone data and fiscal concerns in the Eurozone. However, the euro recovered following hawkish comments from ECB members. Germany reported a decrease in Nov PPI and a drop in the Jan GfK consumer confidence index.

USD/JPY rose sharply to a 4-week high, despite the BOJ’s cautious stance on further interest rate hikes. Concerns about Japanese fiscal policy and a record budget proposal are weighing on the yen. Japan’s Nov national CPI met expectations, and the BOJ is expected to keep raising rates if economic conditions remain favorable.

Precious metals, including gold and silver, closed higher on Friday. Weaker US economic data and expectations of additional Fed rate cuts are supporting precious metals. Safe-haven demand, geopolitical risks, and a potential dovish Fed policy underpin precious metals. Strong central bank demand and concerns about Chinese silver inventories are also supporting prices.

Read more at Yahoo Finance: Dollar Moves Higher on Yen Weakness and Fed Comments