On December 8, data released by the University of Michigan showed that the preliminary consumer sentiment index for December rose to 53.3 from 51 in November. The survey covered responses collected between November 18 and December 1. The median estimate from economists was 52. Among sub-indices, the overall expectations index climbed to 55, a four-month high, compared to 51 in November and an expected 52.7. Meanwhile, the current conditions index fell to a record low of 50.7, missing expectations of 52.1 and down from 51.1 previously. Democratic respondents expressed heightened concerns, with sentiment at its worst level ever, while the confidence gap between Republicans and Democrats widened significantly.

Inflation expectations, a key market focus, showed the one-year outlook dropping to 4.1% in December, the lowest since January, below the expected 4.5%. The five-year inflation expectation also declined to 3.2%, compared to forecasts of 3.4%.

Separately, data from the Bureau of Economic Analysis (BEA) revealed that the U.S. September PCE price index rose 0.3% month-on-month, matching expectations, while the year-on-year increase stood at 2.8%, in line with forecasts. Core PCE, excluding volatile food and energy prices, edged up 0.2% monthly and 2.8% annually, meeting Bloomberg’s consensus. The closely watched SuperCore PCE dipped slightly to 3.25% due to stagnant growth in financial services and hospitality sectors.

Key data to watch today includes Germany’s October industrial production, the Eurozone’s December Sentix investor confidence index, and Canada’s November leading indicator.

**Dollar Index** The dollar index traded sideways on Friday, closing marginally lower near 98.90. Rising expectations of a Fed rate cut in December weighed on the greenback, though solid U.S. economic data and caution ahead of the Fed’s policy decision limited losses. Resistance is seen near 99.50, with support at 98.50.

**EUR/USD** The euro consolidated slightly lower around 1.1650, pressured by profit-taking and cautious trading ahead of the Fed meeting. Strong U.S. data added downward pressure, but the Fed’s dovish outlook and positive Eurozone data capped losses. Resistance lies at 1.1750, support at 1.1550.

**GBP/USD** Sterling edged higher to 1.3340, buoyed by Fed rate cut expectations. However, robust U.S. data and lingering Bank of England easing bets restrained gains. Watch resistance at 1.3450 and support at 1.3250.