The US Dollar is experiencing increased selling pressure as investors increasingly factor in the likelihood of interest-rate cuts in early 2024. Despite efforts by various US Federal Reserve officials to downplay expectations of imminent cuts, the market is choosing to overlook their remarks and warnings. While US equities are enjoying a Christmas rally, US bond yields have seen a significant decline, leading to a substantial narrowing of the spread gap between the US Dollar and foreign currencies.

On the economic front, the latest data points reveal that Durable Goods is a positive surprise across the board, providing the US Dollar with some momentum to push back. The fact that consumers are still spending and even increasing their spending indicates that a recession is not imminent, a factor crucial for the rate cuts anticipated by the markets in early 2024. Meanwhile, Michigan numbers are in line with expectations, and the market is interpreting them as confirmation of the downward trend in inflation.