A high-stakes session on the FOREX, where the Dollar is dancing on a razor's edge.
The Dollar Index (-0.15% at 101.70, after 101.45 at the day's low) is on the verge of confirming the breakdown of a major medium-term support - and oblique - level: 101.90.

This level has already been tested in mid-December, and is the last rampart on the downside: should it be breached, the next target, the '100' level, would be 94.

The euro nibbles a few fractions (+0.05%) and rises against the dollar (towards 1.1015) to test new highs since mid-June, with investors betting that the US Fed will beat the ECB with its first rate cuts.

This expectation is supported by the PCE index: inflation moderated to an annualized 2.6% in November, down 0.3 points on October, and core inflation (excluding food and energy) contracted from 3.4% to 3.2% month-on-month, according to the Commerce Department.
Released at the same time, consumer spending in the US rose by 0.2% month-on-month in October, with incomes up 0.4% month-on-month.

This is not inflationary per se, but we must keep an eye on energy prices: the oil market continues to be underpinned by geopolitical factors, in this case tensions in the Red Sea, which more than offset the prospect of a slowdown in global economic activity.
Brent crude thus appreciated by 1.2% to $80.3 a barrel.

Note that gold, a safe-haven par excellence and closely linked to the $ by an inverse relationship: gold is rising towards $2056 an ounce (+1%)... and a fall in the $ could quickly send it above $2100/Oz.

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