The dollar index (DXY00) extended Monday’s gains and is up by +0.40% at a 1.5-week high. The dollar is climbing today on hawkish comments made by Kansas City Fed President Jeff Schmid on Monday evening, who said the Fed needs to continue pressing against inflation that has remained stubbornly high. Also, political uncertainty in France and Japan is undercutting the euro and yen to the benefit of the dollar.
The ongoing shutdown of the US government is bearish for the dollar as the shutdown entered its second week on Monday. The longer the shutdown is maintained, the more likely the US economy will suffer, and GDP growth will stagnate, a negative factor for the dollar.
