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The dollar index (DXY00) rose by +0.27% on Tuesday. Soaring T-note yields on Tuesday strengthened the dollar’s interest rate differentials and pushed the dollar higher. Also, Tuesday’s +5% surge in WTI crude oil to a 6-week high raised inflation expectations, which could potentially persuade the Fed to raise interest rates, a supportive factor for the dollar. In addition, Tuesday’s stock slump boosted liquidity demand for the dollar.
Gains in the dollar were limited on Tuesday amid weaker-than-expected US economic news, including Aug ISM manufacturing, July construction spending, and July JOLTS job openings.
The US Aug ISM manufacturing index fell -1.0 to 54.6, weaker than expectations of 55.2. The Aug ISM prices paid sub-index was unchanged at 71.1, stronger than expectations of a decline to 70.8.
US July construction…
