On Tuesday, the U.Seconomic landscape was punctuated by the release of retail sales data for November, which printed a robust monthly increase of 0.7%. This impressive figure exceeded the anticipated growth of 0.5%, with the previous month's value being revised upward from 0.4% to 0.5%. Such data not only signals a strengthening in retail activity but also marks an encouraging start to the holiday shopping season, reflecting the persistent resilience of American consumersHowever, it's worth noting that when excluding automotive and gasoline sales, the growth settled at a mere 0.2%, lagging behind the broader expectation of 0.4%. Furthermore, the control group data, which filters out some of the more volatile categories, matched projections with a 0.4% increaseThese robust retail figures, combined with a relatively moderate inflation environment observed over the preceding months, hint at a potential pause in interest rate cuts from the Federal Reserve in January

The incoming administration’s proposed policies, particularly the imposition of tariffs on imported goods and large-scale deportations of undocumented immigrants, are projected to introduce complexities to the Fed's decision-making processAccording to Oliver Allen, a senior U.Seconomist at Pantheon Macroeconomics, "sticky inflation that exceeds targets will affect the Federal Reserve’s decisions next year, but due to anticipated tariff impacts squeezing real post-tax incomes and damaging confidence, we believe the committee will initially worry more about the labor market."

Additionally, in a remarkable development on Monday, Canadian Finance Minister Chrystia Freeland unexpectedly resigned, sending shockwaves through the foreign exchange marketsIn her resignation statement, Freeland cited significant differences with Prime Minister Justin Trudeau regarding responses to U.S

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tariff threats and related issuesShe had previously stated that if the U.Swere to impose tariffs on Canadian products, the federal government along with provincial counterparts would respond forcefully with counter-tariffsCanadian media outlets widely reported that Freeland, a loyal ally of Trudeau and one of his strongest supporters over the years, left her position under surprising circumstancesHer abrupt departure was seen not only as a revelation of deep divisions within the Canadian government but also contributed to growing concerns about the economic outlook for CanadaAccording to Skye Montgomery-Coning, a foreign exchange strategist at Barclays Bank, the recent turbulence in Canadian politics "is a sign that the currency faces greater troubles,” noting that the Canadian dollar has been under persistent pressure owing to its economy lagging behind the U.Sand the looming threat of tariffs

"We see the Canadian dollar remains under selling pressure," Montgomery-Coning remarked in a recent interview.

Looking ahead, important data releases are anticipated today, including the U.Kannual CPI for November, the U.Kretail price index annual rate for November, the Eurozone harmonized CPI annual rate for November, as well as the preliminary U.Sbuilding permits for November and the month-on-month annualized housing starts data for the same monthAdditionally, eyes will be on the Federal Reserve’s upcoming interest rate decision, set to be announced in the early hours of the following day.

In the commodities market, the gold-to-dollar ratio reflected some turbulence yesterdayThe yellow metal experienced slight declines, with trading settling around the 2648 markThe primary factors weighing on gold prices were the dollar index rallying due to short covering and positive economic indicators

There was also a cautious stance in the market ahead of the Fed's latest interest rate decision which added additional pressure on goldNevertheless, the prevailing expectations for rate cuts still provided a limit on gold's retracement spaceMarket attention today focuses on levels around 2660 for resistance, with support found near 2630.

Shifting gears to currency trading, the dollar-yen pair faced downward pressure yesterday, closing slightly lower with the current exchange price hovering around 153.50. Profit-taking took a toll on the currency pair, further exacerbated by the looming expectations of Fed rate cuts this weekOn the other hand, speculation regarding a potential rate hike by the Bank of Japan next January provided some foundational support for the pairToday's resistance levels will be closely watched around 154.50, with support found near 152.50.

Meanwhile, the dollar-loonie pair saw an upward shift yesterday, breaking through the significant 1.4300 threshold with current trading around 1.4320. A rally in the dollar index, bolstered by encouraging economic data, lent support to the exchange rate