The dollar index (DXY00) Friday rose by +0.30%. The dollar recovered from a 3-1/2 week low Friday and moved moderately higher. Short covering emerged in the dollar Friday after the University of Michigan US Dec consumer sentiment index rose more than expected to an 8-month high. Also, hawkish Fed comments supported the dollar when Fed Governor Bowman said the Fed should proceed cautiously with rate cuts, and Cleveland Fed President Hammack said the Fed is near the point of slowing interest rate cuts.
The dollar Friday initially moved lower on the US Nov payroll report that showed the Nov unemployment rate unexpectedly increased, which boosted the chances for a Fed rate cut at the Dec 17-18 FOMC meeting to 85% from 70% before the report.
