The dollar index hit a 4.25-month low, down 0.79% amid speculation of US-Japan FX intervention. Yen strength persists after US intervention rumors, while political risks and potential government shutdowns weigh on the dollar. ADP reports a slight rise in US private payrolls, while the Nov S&P home price index outperforms expectations.

The Richmond Fed manufacturing survey shows a slight improvement, with odds of an FOMC rate cut at 3%. Dollar weakness persists, with expectations of future rate cuts in the US. EUR/USD hits a 4.5-year high on euro strength and positive economic news from the Eurozone.

USD/JPY falls as the yen reaches a 2.5-month high, benefiting from US-Japan FX intervention speculation. Japan sees revised machine tool orders and Dec PPI services prices, with no expected BOJ rate hike in March. Precious metals prices drop today after reaching all-time highs due to dollar weakness and political uncertainty.

Gold and silver prices fall as investors consolidate recent gains, fueled by US deficits and policy uncertainty. Safe-haven demand supports precious metals amid geopolitical risks and Fed monetary policy expectations. Central bank and fund demand for gold remains strong, with China’s PBOC increasing gold reserves and rising long holdings in gold and silver ETFs.

Read more at Yahoo Finance: Dollar Retreats on US Fiscal and Political Risks