The U.S. dollar is riding high, advancing by 0.20%-0.50% today against major G10 currencies. Most currency pairs have extended their trends from last week. The Dollar Index, which hovered around 100 in late September, is now nearing the 106.00 mark.
Stock markets, however, are feeling the pressure, with U.S. index futures down about 0.20%-0.35%. Gold has lost its recent shine, having dropped since hitting a peak near $2,790 at the end of October. It fell below its 50-day moving average yesterday, and after declines of 2.75% on Friday and another 3.3% yesterday, December WTI crude oil is now trading in a more subdued range of $65.75-$68.60.

Asia-Pacific Markets
The Bank of Japan will not meet again until December 19, but the yen’s weakness has fueled speculation of a potential rate hike. The swaps market currently prices in an 11 basis point hike, with a 35 basis point hike anticipated by mid-next year.
The dollar traded within a narrow range yesterday during the North American holiday session, mainly between JPY153.65 and JPY153.95. Stronger U.S. yields today have nudged the dollar higher to JPY154.15.
Meanwhile, the Australian dollar, which briefly moved above $0.6600 yesterday, faced renewed selling pressure and was pushed to around $0.6535 today.

European Markets
Germany's ZEW survey results fell short of expectations, worsening rather than improving as economists had hoped. The euro, which was trading near $1.0935 prior to recent U.S. election results, slipped below $1.0630 yesterday and has edged close to $1.0610 today in Europe. The year-to-date low for the euro is near $1.06, set back in April.
Sterling also faces challenges, dipping below $1.28 for the first time since mid-August, with even minor gains proving difficult to sustain.

American Markets
Since the post-election rally, the Dollar Index has surged from about 103.40 on election day last Tuesday to nearly 105.90 today, approaching its year high set in April at 106.50. While today’s New York Fed survey on inflation expectations and the Senior Loan Officer Survey aren’t expected to be major market movers, tomorrow’s CPI release is likely to attract more attention. Federal Reserve Chair Jerome Powell recently reaffirmed that officials anticipate a challenging road ahead and will need more consistent data before reassessing their view that inflation is trending back toward the 2% target.