The ongoing week maintains a primarily consolidative trend for the US dollar. G10 currencies show marginal fluctuations of around ±0.25% today, with a slightly broader range observed over the week. The probability of a Fed rate cut in March remains virtually unchanged, hovering around 75%.

A joint US and UK strike on Houthi forces in Yemen influenced a rise in oil and gold prices, though its impact on the markets is relatively minimal.
Apart from Japan and India, most major markets in the Asia Pacific region experienced modest losses. Europe's Stoxx 600 exhibits an approximately 0.8% increase, potentially marking the most significant gain since mid-December, if sustained. Conversely, US index futures demonstrate a slight softening.

Asia Pacific
In the Asia Pacific region, Japan's November current account surplus contracted in line with historical patterns, deviating from the anomaly observed in 2022. For the first time in 16 years, Japan's current account surplus widened in November 2022.
Following the release of US CPI data, the dollar reached a new high at JPY146.40 on December 11 but encountered resistance around JPY145.25 in the European morning.

The Australian dollar faced selling pressure post-US data but rebounded above the week's initial lows, maintaining a tight range around $0.6700.
Australia's forthcoming December employment figures may influence the Aussie's trajectory, particularly if the data disappoints, leading to a downside correction.

Europe
In Europe, the UK reported a 0.3% growth for November, slightly surpassing expectations and offsetting the previous month's equal contraction. However, the three-month change shifted into contraction, marking the first time since October 2022.

The euro touched a session high just below $1.10 ahead of the US CPI release, dipped to around $1.0930 in the subsequent dollar rebound, and recovered to approximately $1.0980 in the North American afternoon.
Sterling briefly achieved a new yearly high at $1.2785 but retreated to slightly below $1.2750 in the European morning, where renewed buying interest emerged.

America
Following the previous day's CPI release, the December PPI takes center stage to conclude the week. The CPI print exceeded expectations with a 0.3% increase in the headline rate. The core rate also saw a 0.3% uptick, resulting in a year-over-year rate of 3.9%, down from 4.0%.

Post-CPI, the US dollar extended slightly beyond CAD1.3440, reaching its highest level since December 14. However, the greenback faces downward pressure today and appears poised to test the week's low near CAD1.3340.