Gold struggled below $4,200 as the dollar reached an 18-month high. Traders see nearly an 88% chance of a December Fed hike, making Wednesday’s US CPI a key test for rate expectations.

The euro slipped below 1.12 as France’s fiscal challenges and political divisions complicated its deficit reduction plans. The dollar benefited from stronger US economic conditions, while higher energy costs added pressure on European currencies.

The yen recovered toward 158 per dollar as Japan’s producer inflation slowed to 6.8%, keeping a December or January BoJ hike in play. 

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