Weekly Analysis

The dollar index hit a two-year high of 108.5 on hawkish Fed signals but eased after core PCE prices rose just 0.1% in November, sparking hopes for disinflation.

The dollar index rose above 107, gaining 1% for the week, as markets priced in a 25-basis point Fed rate cut, with 2025 remaining uncertain.

The U.S. Dollar Index ended flat this week as employment data met expectations, manufacturing PMI exceeded forecasts, and Powell’s cautious remarks on rate cuts raised the probability of a December 25bps cut to 72%. 

This week, markets reacted to economic data and policy shifts, with the Dollar Index ending a nine-week rally. Major currencies gained against the dollar, driven by inflation dynamics and central bank signals. Commodities like gold and silver declined on easing geopolitical risks, while U.S. Treasury yields and equities saw mixed performances amid nuanced economic trends.

Global markets last week experienced a continued dollar rally, a rebound in gold and crude oil, and mixed performances in equities and currencies, as geopolitical tensions and shifting central bank policies shaped investor sentiment.

Global financial markets last week saw a strong rally in the U.S. dollar, weak performance in metals, and gains in Treasury yields. The dollar's surge, driven by inflationary expectations and geopolitical developments, weighed heavily on other currencies and commodities.

The dollar index closed higher with expectations of inflationary policies under Trump’s presidency.

Gold gained early in the week before retreating with silver also losing as Fed rate cut expectations weakened.