The dollar is recovering from the previous day's close call with its lowest level since August: the dollar is benefiting above all from the weakness of the pound, which dropped -0.8% (to 1.2625) after very "moderate" inflation figures (CPI contracted from 4.6% to 3.9%) sent the British currency's yield down -9pts.

However, the 10-year T-Bonds erased no less than -10pts to 3.855%, while Wall Street turned sharply downwards (-1.5%) against a backdrop of sudden risk aversion (the VIX jumped +9% to 13.6).
In other words, the 'rate differential' may not be a very pertinent explanation for the greenback's rise (including against the £), quite the opposite.
The euro fell back -0.4% to 1.0935, the Swiss franc -0.3% and the yen held up better (-0.1%) after a heavy fall of -0.9% the previous day (BoJ maintaining its accommodating monetary policy).

The reason for the Dollar's firmness is more logically explained by some good US statistics: traders discovered that US consumer confidence had risen much more strongly than expected in December (from 101, to 110.7, instead of the 103 expected), according to the results of the Conference Board's monthly survey.

In an unexpected sign of robustness on the real estate front, sales of older homes rose by 0.8% last month compared with October, according to the National Association of Realtors (NAR).

The median selling price reached $387.600, up 4% year-on-year, and the inventory of unsold existing homes fell by 1.7% month-on-month to 1.13 million at the end of November, or 3.5 months at the current rate of absorption.

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