The US dollar declined in European trade on Tuesday and moved in a negative zone for the third straight session, trading near a week low amid mixed reports about US President-elect Donald Trump’s tariff plans. 

Now investors await important US data on the services sector and jobs opportunities later today, which could offer fresh pricing for the odds of a January Fed interest rate cut.

The Index

The dollar index fell 0.45% today to 107.85, with a session-high at 108.43.

On Monday, the index lost 0.6%, the second loss in a row on profit-taking away from a 25-month peak at 109.53.

Dollar was hurt by a Washington Post report that indicated US President-elect Donald Trump will likely implement a less aggressive than expected tariff plan.

During his election campaign, Trump proposed 10-20% tariffs on all global imports in order to protect US industries and boost local production.

Newer reports now indicate that his transition team is considering a more focused approach, zooming in on defense and energy sectors. 

Such an outlook would contain the potential negative fallout of a blanket tariff system.

US Rates

According to the Fedwatch tool, the odds of a January Federal Reserve interest rate cut stood at just 7% as investors now await a batch of important US data later today to gather more clues.

Federal Reserve member Liza Cook said it’s logical to cut interest rates more gradually as the labor market remains strong and inflation proves stubborn.

US Data

Now investors await a batch of US data later today, with the ISM services PMI expected up to 53.5 in December from 52.1 in November.

The US JOLTS job opportunities survey is expected to show the availability of 7.73 million jobs in November, down slightly from 7.74 million in October.

Eurozone’s consumer prices rose 2.4% y/y in December according to initial data, up from 2.2% in November, and matching expectations. 

Excluding food and fuel, prices rose 2.7% as expected, same as November.

The data showcases renewed inflationary pressures on the ECB policymakers, which hurts the odds of another interest rate cut in January.

Gold prices rose in European trade on Tuesday after two days of losses, while holding its ground above the psychological barrier of $2600 as the US dollar lost ground. 

Now investors await important US data on the services sector and jobs opportunities later today, which could offer fresh pricing for the odds of a January Fed interest rate cut.

The Price

Gold prices rose 0.4% today to $2646 an ounce, with a session-low at $2633.

On Monday, gold lost 0.15% on profit-taking away from a three-week high at $2665.

US Dollar

The dollar index fell 0.45% on Tuesday on track for the third loss in a row against a basket of major rivals. 

A weaker dollar makes greenback-denominated commodities more attractive to holders of other currencies.

Dollar was hurt by a Washington Post report that indicated US President-elect Donald Trump will likely implement a less aggressive than expected tariff plan.

US Rates

According to the Fedwatch tool, the odds of a January Federal Reserve interest rate cut stood at just 7% as investors now await a batch of important US data later today to gather more clues.

SPDR 

Gold holdings at the SPDR Gold Trust remained unchanged yesterday at a total of 871.08 tons, the lowest since December 19.

Euro rose in European trade on Tuesday and maintained the gains for the third straight session against the US dollar, about to mark a week high after accelerated German inflation reduced the odds of an ECB interest rate cut in January. 

Now investors await mainline Eurozone inflation data later today for December, which will provide more clues. 

The Price 

The EUR/USD pair rose 0.15% to $1.0403, with a session-low at $1.0376.

On Monday, the pair rose 0.8%, the second profit in a row away from a 26-month nadir at $1.0223.

Euro received another boost from a Washington Post report that indicated US President-elect Donald Trump will likely implement a less aggressive than expected tariff plan.

German Inflation 

Earlier German data showed consumer prices rose 2.6% in December, up from 2.2% in November, and above estimates of 2.4%.

Renewed inflationary pressures in the eurozone’s largest economy would likely prompt the European Central Bank to delay the timing of the next rate cut.

European Rates

Following the data, the odds of an ECB 0.25% interest rate cut in January fell from 65% to 55%.

Now investors await consumer prices data for the whole eurozone, expected to show an increase to 2.4% in December from 2.2%.