The dollar index (DXY00) today is up by +0.06%.  Weakness in the yen is supporting gains in the dollar today, as the yen attempts to hold above last Friday's 10-month low.  Gains in the dollar are limited after dovish comments from Fed Governor Christopher Waller, who said he's advocating a December rate cut by the Fed.  Also, today's strength in stocks has reduced liquidity demand for the dollar.

Fed Governor Christopher Waller said he's advocating for a December rate cut by the Fed due to concerns about the labor market and then taking a meeting-by-meeting approach starting in January.

The markets are discounting a 70% chance that the FOMC will cut the fed funds target range by 25 bp at the next FOMC meeting on December 9-10.

EUR/USD (^EURUSD) today is up by +0.08%.  The euro is slightly higher today due to improved prospects for an end to the war in Ukraine after NATO Secretary General Rutte said he's sure a peace deal to end the war in Ukraine will get done, as Russia is "not in good place" after failing to make significant progress on the battlefield and losing 20,000 troops a month.  Limiting gains in the euro was the unexpected decline in the German Nov IFO business confidence. 

The German Nov IFO business climate unexpectedly fell -0.4 to 88.1, weaker than expectations of an increase to 88.5.

Swaps are pricing in a 2% chance of a -25 bp rate cut by the ECB at the December 18 policy meeting.

USD/JPY (^USDJPY) today is up by +0.38%.  The yen is under pressure today on concerns about Japan's debt burden.  The yen is just above last Friday's 10-month low against the dollar after the Japanese government last Friday approved a 17.7 trillion yen ($112 billion) stimulus package, higher than the 13.9 trillion yen package released last year by former Prime Minister Ishiba.  Today's decline in T-note yields is limiting losses in the yen.  Trading activity is expected to be below normal, as Japanese markets are closed today for the Labor Thanksgiving Day holiday.   

The markets are discounting a 23% chance of a BOJ rate hike at the next policy meeting on December 19.

December COMEX gold (GCZ25) today is up +8.70 (+0.21%), and December COMEX silver (SIZ25) is up +0.097 (+0.19%).

Gold and silver prices recovered from early losses and moved slightly higher today after Fed Governor Christopher Waller's dovish comments boosted demand for precious metals as a store of value, as he said he's advocating a December rate cut by the Fed. Precious metals continue to have some underlying safe-haven demand amid uncertainty over US tariffs, geopolitical risks, central bank buying, and political pressure on the Fed's independence. 

Precious metals initially moved lower today as a rally in stocks curbed their safe-haven appeal. Also, improving prospects for an end to the war in Ukraine are curbing safe-haven demand for precious metals.  

Strong central bank demand for gold is supportive of prices, following the most recent news that showed bullion held in China's PBOC reserves rose to 74.09 million troy ounces in October, the twelfth consecutive month the PBOC has boosted its gold reserves.  Also, the World Gold Council recently reported that global central banks purchased 220 MT of gold in Q3, up 28% from Q2. 

Since posting record highs in mid-October, long liquidation pressures have weighed on precious metals prices.  Holdings in gold and silver ETFs have recently fallen after posting 3-year highs on October 21.

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